Upstart shares just tanked 25%: find out why

Upstart Holdings Inc (NASDAQ: UPST) tanked more than 25% in extended trading on Tuesday after the AI lending platform reported a disappointing third quarter and issued weak guidance for the future.

Upstart Holdings Q3 financial highlights

• Lost $56.2 million that translates to 69 cents per share
• That compares to $27.8 million of net income last year
• Adjusted loss on a per-share basis printed at 24 cents
• Revenue slipped 31% year-on-year to $$157 million
• Consensus was 8 cents loss on $169 million revenue

Other notable figures in the earnings report

Upstart shares are now trading at tenth of a price at which they started the year as the Nasdaq-listed firm continues to wrestle with loan funding. Aggressive rate hikes have also weighed on this financial technology stock.

Transaction volume and conversion rate were down 48% and 23%, respectively, versus a year ago. In the earnings press release, CEO Dave Girouard said:

Upstart shares tumble on weak guidance

For the current financial quarter, Upstart forecasts its revenue to fall between $125 million and $145 million. In comparison, analysts had called for $185.3 million. Still, the Chief Executive added:

Upstart spent about $25 million on share repurchase in Q3. Investors interested in trading this stock on the sell-off should know that the Wall Street currently rates Upstart shares at “underweight”.