What To Expect From Upstart’s (UPST) Q1 Earnings

Jabin Bastian /
2023/05/08 5:05 am EDT
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AI lending platform Upstart (NASDAQ:UPST) will be reporting earnings tomorrow afternoon. Here's what to expect.

Last quarter Upstart reported revenues of $151.4 million, down 50.4% year on year, beating analyst revenue expectations by 14.1%. It was a mixed quarter for the company, with an impressive beat of analyst estimates but underwhelming revenue guidance for the next quarter.

Is Upstart buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Upstart's revenue to decline 67.9% year on year to $99.7 million, a significant deceleration compared to the 154% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.81 per share.

Upstart Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St's revenue estimates twice over the last two years.

Looking at Upstart's peers in the vertical software segment, some of them have already reported Q1 earnings results, giving us a hint what we can expect. nCino delivered top-line growth of 45.7% year on year, beating analyst estimates by 4.5% and PTC reported revenues up 7.31% year on year, exceeding estimates by 0.55%. nCino traded up 2.19% on the results, PTC was up 1.46%. Read our full analysis of nCino's results here and PTC's results here.

The technology sell-off has been putting pressure on stocks since November 2021, and while some of the vertical software stocks have fared somewhat better, they have not been spared, with share price declining 6.57% over the last month. Upstart is down 22.4% during the same time, and is heading into the earnings with analyst price target of $11.3, compared to share price of $13.35.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.