Upstart stock price forecast after falling like a rock

By:
on May 10, 2022
  • The Upstart stock price has crashed by more than 50%.
  • The company issued a weak forward guidance.
  • It has declined from an all-time high of $401 to $36.

The Upstart (NASDAQ: UPST) stock price has crashed as investors focus on the company’s results and forward guidance. The shares plummeted by more than 50% to about $36, which is lower than its Monday’s close of $77. The current price is about 91% below the all-time high of $401. As a result, the company’s market cap has moved to about $3.5 billion.

Upstart weak earnings

Upstart Holdings is a fintech company that provides loans to individuals. It offers loans to help people pay off your credit cards, consolidate debts, wedding, medical, and refinance vehicles among others. 

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Upstart does not offer loans direct from its resources. Instead, it has partnered with other companies like First Federal, Customers Bank, and First National Bank of Omaha among others.

In a statement on Monday, Upstart said that its loan transactions rose to more than $4.5 billion in the first quarter. It also added more than 500 dealerships and 57 banks and credit unions in its platform.

As a result, Upstart had net revenues of $310 million in the quarter, which was about 156% year-on-year. Revenue from fees rose to $314 million. Net interest income moved to a negative level even as the loans in its balance sheet saw a sustained decline in valuation.

Upstart processed about 465k loans as the number if new borrowers rose to 350k. Its balance sheet is still strong, with its net cash being at $1 billion. The CEO said:

“We see a clear path to building a company with more than $10 billion in revenue in the coming years and are maniacally focused on achieving that goal.”

The Upstart stock price declined after the firm issued weak guidance. The company said that its revenue will be between $295 million and $305 million. The mid-point of this revenue growth was about 55%. For the full year, the company expects that its revenue rose to $1.25 billion, representing a 47% year-on-year growth. 

Upstart stock price forecast

The daily chart shows that the Upstart share price has been in a strong downward trend in the past few months. The stock closed the day at $75.71, which was an important support level. The stock will open at $36.57, which was the lowest level since November 2020. Along the way, it has dropped below all moving averages.

Therefore, there is a possibility that the UPST stock price will keep falling as bears attempt to move below the support at $30.

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