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Pathward’s Credit Scare Tests Its Comeback StoryUpstart NASDAQ: UPST CEO Paul Gu said the company is concentrating its efforts on expanding its core personal loan business, which he described as the company’s most differentiated and highest-margin product. Gu said the segment’s growth accelerated in the second quarter, with core personal loan growth reaching roughly 3.5 times the growth recorded across the prior three quarters combined.

Gu, who previously served as Upstart’s chief technology officer, said the company has shifted internal priorities across marketing, application conversion, approvals, rate acceptance and verification to emphasize personal loans. He said the company had previously directed more resources toward other initiatives but has since refocused teams on increasing personal loan volume.

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MarketBeat Week in Review – 03/30 - 04/03“Core personal loans is what we’re really, really good at doing,” Gu said, citing the company’s ability to separate credit risk and identify borrowers it believes can be uniquely underwritten in the market.

Product Priorities and Secured Lending While Upstart continues to pursue newer products, Gu said the company has narrowed its list of priorities. He said Upstart paused its auto refinance product because it did not have the same potential, growth profile or momentum as other initiatives.

Upstart Surges on Record Revenue but Wall Street Remains DividedGu said the remaining product bets have large addressable markets, are adjacent to areas in which Upstart already has expertise, and have sufficient momentum to justify additional investment. The company’s secured lending products include auto lending and home equity lines of credit, or HELOCs.

For those newer secured products, Gu said Upstart first focused on validating demand and building third-party capital-provider relationships before turning to unit economics. He said the company believes it has demonstrated demand from auto dealerships and from HELOC borrowers seeking its rates and process.

Upstart is now working to move the secured products from negative contribution margins to profitability. Gu said the company expects those products to reach break-even before the end of the year, after which it plans to focus more heavily on scaling them. He declined to project their long-term margins but said there was no theoretical reason they could not eventually approach the economics of the core personal loan business.

Consumer Stress Remains Elevated Gu discussed the company’s Upstart Macro Index, or UMI, which measures the likelihood that consumers will default on unsecured consumer credit relative to pre-COVID levels. A reading of 1.0 corresponds to conditions in 2018, 2019 and early 2020, he said.

With the UMI at approximately 1.5 as of Sept. 3, Gu said a consumer with the same borrower and loan characteristics was about 50% more likely to default than before the pandemic. He said the index had risen by 12 points since the spring.

Gu attributed the pressure on borrowers in part to inflation exceeding wage growth over roughly the prior six months. He also cited credit card utilization and delinquency data as evidence that American borrowers are under more stress than they were six months earlier.

Still, Gu said investors should not place too much emphasis on short-term changes in the macro index. He said Upstart does not provide near-term results guidance partly because it wants to respond quickly to changing credit conditions. Over a multiyear period, he said, durable improvements in marketing, automation, underwriting and risk separation should matter more than monthly macroeconomic movements.

Gu said that despite higher interest rates and greater consumer stress than in 2021, Upstart is generating more contribution profit than it did during that more favorable macroeconomic period. He attributed that result to several years of technology improvements.

Technology, Capital and Bank Plans Gu said Upstart has continued to improve its lending models since its founding in 2012 and has not exhausted potential avenues for advancement. He said the company has more than 140 million training data points and expects additional data, computing improvements and research into learning algorithms to support increasingly sophisticated models over time.

He described the company as a relatively advanced adopter of artificial intelligence tools internally, saying the technology has contributed to more code being written and faster ticket resolution. Gu said he expects those gains to translate over time into greater revenue growth per employee, though he noted it can be difficult to attribute results precisely.

On funding, Gu said Upstart has retained all of its capital partners in recent years, with agreements being renewed for longer terms, larger amounts and generally better terms. He said the company has not seen evidence that competitors’ funding or marketing activity has materially hurt its ability to originate loans.

Gu also said the company’s planned national bank remains its largest single project in 2026. He said the bank has conditional approval and is expected to launch in early 2027. The investment will be a cost center in 2026, but Gu said it should provide operational benefits by reducing complexity associated with working with nearly 100 originating partners that operate under varying regulatory requirements.

He said the bank does not represent a change in Upstart’s primarily third-party funding strategy. However, it could allow the company to fund some of the approximately $1 billion of loans on its balance sheet more efficiently through lower-cost deposit funding and leverage.

Gu said operating-expense growth is expected to slow to low single-digit quarter-over-quarter growth in the second half of the year. He said Upstart expects to gain operating leverage as secured products improve, internal AI investments mature and the bank project moves toward its anticipated 2027 launch.

About Upstart (NASDAQ:UPST)Upstart Holdings, Inc operates a cloud-based lending marketplace that leverages artificial intelligence and machine learning to assess borrower creditworthiness. The company partners with banks and credit unions, providing its proprietary AI models and underwriting platform to facilitate consumer credit products. By focusing on non‐traditional data points—such as education, employment history and other real‐time indicators—Upstart seeks to improve approval rates and lower loss rates compared with conventional credit scoring methods.

Upstart's core offering centers on unsecured personal loans, which borrowers can use for purposes such as debt consolidation, home improvements or major purchases.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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BURLINGAME, Calif.--(BUSINESS WIRE)--Upstart Publishes August 2026 Originations and Latest UMI.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of UPST, SOFI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

This AI lender is suggesting the U.S. economy is decelerating.

*Stock prices used were the afternoon prices of Aug. 26, 2026. The video was published on Aug.28, 2026.

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Upstart. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Scott Darling, the chief legal officer of Upstart Holdings, Inc. (UPST +4.99%), sold 7,696.0 shares of common stock on August 20, according to a recent SEC Form 4 filing.

Transaction summaryMetricValueTransaction value$216,181Shares sold7,696Post-transaction shares (total)119,916Post-transaction shares (directly held)73,306Post-transaction shares (indirectly held)46,610Post-transaction value$3.46 millionTransaction value based on SEC Form 4 weighted average sale price ($28.09); post-transaction value based on the August 20 market close ($28.86).

Key questionsWhat was the primary driver for this share disposition?
The transaction was a non-discretionary sale conducted automatically to cover tax liabilities associated with the vesting of restricted stock units.How does this sale affect the reporting owner's long-term equity exposure?
While direct ownership decreased to 73,306 shares, the insider retains substantial exposure through 120,000 total shares, including a significant indirect position held by the Darling Family Trust.What is the current scale of insider ownership at the company?
Following this transaction, insiders collectively hold 0.13% of the outstanding shares, with Scott Darling's total beneficial holdings valued at $3.46 million as of the August 20 market close.Company OverviewMetricValueShare Price (as of market close 2026-08-20)$28.86Market Capitalization$2.8 billionRevenue (TTM)$1.2 billionNet Income (TTM)$60.3 millionCompany SnapshotUpstart is a fintech company operates a cloud-based artificial intelligence lending platform that originates unsecured personal loans, small dollar loans, auto refinance, auto retail loans, auto secured personal loans, and home equity lines of credit across the United States.The company generates revenue through its three business segments--Personal Lending, Auto Lending, and Other--by leveraging proprietary AI technology to assess creditworthiness and facilitate lending transactions on its platform.Upstart's primary customers include individual borrowers seeking consumer credit products and financial institutions utilizing the company's platform to originate and manage loans.Upstart Holdings is a technology-enabled lending platform with a market capitalization of $2.8 billion and TTM revenue of $1.2 billion, demonstrating significant scale in the digital lending ecosystem. The company differentiates itself through its proprietary AI-driven underwriting capabilities, which enable faster loan origination and improved credit risk assessment compared to traditional lending methodologies. With headquarters in San Mateo, California, Upstart operates as a critical infrastructure provider in the consumer lending market, serving both individual borrowers and institutional lending partners.

What this transaction means for investorsDarling's sale is routine, tax withholding on vested RSUs, and 7,696 shares is a small piece next to the 120,000 he still holds when you count the Darling Family Trust.

That said, his office is the one that delivered perhaps Upstart's biggest news this year outside of earnings. The OCC granted conditional approval in July for Upstart to establish a nationally chartered bank, a four-and-a-half month process that Darling's legal team would have shepherded through the application. Annie Delgado, the risk officer proposed to run the new bank, put the stakes plainly when the approval landed, saying "it's important for the public to understand that efficiency doesn't diminish oversight." Upstart still needs sign-off from the FDIC and the Federal Reserve before the bank can open, and those approvals aren't guaranteed, the OCC rejected a similar application from Wise the very next day. Meanwhile, Upstart also locked in a new forward-flow agreement with Castlelake for up to $4 billion in loan purchases. Ultimately, important catalysts are in play here, and long-term investors should keep an eye on them.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Upstart. The Motley Fool has a disclosure policy.

Key Takeaways SoFi emerges as the stronger portfolio candidate as diversified growth and profitability offset lending risk.SoFi posted 40 adjusted revenue growth, 44% EBITDA growth and $157 million in GAAP net income.Upstart's revenue rose 42%, but elevated UMI, external funding reliance and secured-product losses add risk. SoFi Technologies, Inc. (SOFI - Free Report) and Upstart Holdings, Inc. (UPST - Free Report) both sit at the intersection of consumer lending and financial technology. Each uses data, automation and digital distribution to make credit easier to access, while both are trying to widen their product sets and expand repeat customer relationships. Their second-quarter results also showed fast revenue and origination growth, giving investors two very different ways to participate in a healthier fintech lending cycle.

SoFi operates a regulated, deposit-funded financial platform spanning lending, banking, investing, payments and technology services. However, Upstart is primarily an AI-driven lending marketplace that depends more heavily on bank, credit-union and institutional capital partners to fund loans.

This makes SoFi more diversified across revenue sources, while Upstart is more directly exposed to credit demand, funding appetite and macro-driven default risk. The key question is which business model offers the stronger balance of growth, earnings durability and risk now.

The Case for SOFISoFi entered the second half of 2026 with strong operating momentum. Second-quarter adjusted net revenues rose 40% year over year to $1.21 billion, while adjusted EBITDA climbed 44% to $358 million. GAAP net income reached $157 million, showing that rapid growth is now arriving alongside meaningful profitability rather than replacing it.

The customer engine also looks healthy. Members increased 35% to 15.8 million, products rose 42% to 24.4 million, and 51% of new products were opened by existing members. This matters because SoFi can spread acquisition costs across more services, which is a structural advantage over Upstart's more credit-centered operating model.

Diversification is another key strength for SOFI. Financial Services and Technology Platform revenues together reached $551 million, or 46% of adjusted net revenues, while fee-based revenues totaled $472 million. SoFi is also expanding investing options, including new private-market funds from CAZ Investments and AngelList, giving members more reasons to stay within its ecosystem.

Lending remains important, but SoFi has more funding flexibility. Total originations hit $14.8 billion, including $3.1 billion through its loan platform business. Deposits reached $45.5 billion, supporting a 5.98% net interest margin. Compared with Upstart, SoFi can combine balance sheet lending with partner-funded originations instead of relying mainly on outside capital.

However, the main risk is that personal lending remains a major earnings driver, leaving SoFi exposed to credit and rate changes. Even so, management raised 2026 adjusted net revenue guidance to $4.75 billion to $4.85 billion while maintaining profitability targets. The broader model gives it more room to absorb lending volatility.

The Case for UPSTUpstart's second quarter was clearly better than its recent track record. Revenues rose 42% year over year to $365 million, originations increased 50% to $4.2 billion, and the company returned to GAAP profitability with $16.5 million of net income. Adjusted EBITDA reached $76.9 million, a 21% margin.

Its core technology remains a key strength. Upstart says its personal-loan model is 2.74 times as accurate as a traditional credit model, while 91% of funded loans were fully automated. Funding improved with committed capital capacity reaching $10.8 billion through Aug. 4, including a new Castlelake agreement covering up to $4 billion.

However, the problem is that newer businesses still lag. Auto and Home originations are growing quickly, but their combined contribution margin was still negative 35% in the second quarter. Management expects breakeven by the fourth quarter, yet that target still requires continued execution. SoFi's broader non-lending businesses already contribute at greater scale.

Macro sensitivity is also harder to ignore. Upstart's UMI reached 1.50 in early August, about 50% above its normal-economy baseline and the highest reading since January 2026. July originations were $1.40 billion, roughly in line with the second quarter's monthly average, suggesting that strong quarterly growth has not yet produced obvious acceleration.

Upstart kept guidance at about $1.4 billion of revenues and $294 million of adjusted EBITDA, rather than lifting it after the strong quarter. Management cited higher UMI as a headwind. With results still tied closely to consumer credit conditions and third-party funding, the recovery looks less durable than SoFi's, making the risk-reward profile increasingly difficult.

How Do Estimates Compare for SOFI & UPST?The Zacks Consensus Estimate for SoFi’s 2026 and 2027 sales implies year-over-year growth of 35.52% and 20.16%, respectively. Over the past month, estimates for SOFI’s 2026 and 2027 EPS have been revised marginally upward. Also, the consensus mark for 2026 and 2027 EPS suggests a year-over-year increase of 53.85% and 34.86%, respectively.

For SoFi Technologies: 

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Upstart’s 2026 and 2027 sales calls for year-over-year growth of 36.00% and 30.93%, respectively. However, the consensus EPS estimates for both 2026 and 2027 have been revised downward over the past 30 days, though the figures suggest a year-over-year increase of 26.44% and 47.12%, respectively.

For Upstart:

Image Source: Zacks Investment Research

Price Performance and Valuation of SOFI & UPST

Over the past three months, SoFi shares have rallied 12.6% while Upstart shares have just inched up 0.9%. In comparison, the S&P 500 composite has advanced 2.4% in the same time frame.

Image Source: Zacks Investment Research

SOFI is trading at a forward 12-month price-to-sales of 4.20X, which is on par with its three-year median. Meanwhile, UPST is presently trading at a forward 12-month price-to-sales of 1.67X, which is below its three-year median of 3.91X.

On a forward price-to-sales basis, SoFi carried the richer valuation, while Upstart looks much cheaper on this measure, but the discount reflects a business with greater sensitivity to credit conditions, funding markets and execution in still-unprofitable secured products.

SoFi's premium is easier to understand because revenues are more diversified and profitability is stronger. Still, paying more for SoFi raises the bar for continued member growth, cross-product adoption and credit discipline. The valuation gap favors UPST on price alone, but not necessarily on business quality.

Image Source: Zacks Investment Research

ConclusionBoth companies are growing again, but the quality of that growth differs. SoFi combines lending momentum with deposits, fee income, investing, technology services and profitability, giving it several ways to keep expanding if one area slows. Upstart has improved its core personal-loan business and funding base, yet elevated UMI, loss-making secured products and heavier dependence on external capital keep its outlook more fragile.

For investors choosing between the two, SOFI is the stronger portfolio candidate to retain through normal volatility. UPST's rebound deserves credit, but its risk profile remains high enough that reducing or exiting the position looks more sensible.

While SOFI carries a Zacks Rank #3 (Hold), UPST has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MarketBeat Week in Review – 03/30 - 04/03Upstart NASDAQ: UPST CEO Paul Gu said the company is entering a “second leg” of its development, focused on converting its artificial-intelligence lending platform into sustained profitable growth while expanding into secured credit products.

Speaking at Bank of America’s SMID Cap Executive Insights event, Gu described Upstart as “AI for consumer lending,” operating a marketplace where consumers can seek personal loans, auto loans and home-equity lines of credit, or HELOCs. He said the company ultimately intends to offer a broader suite of consumer credit products.

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Upstart Surges on Record Revenue but Wall Street Remains DividedGu said Upstart’s strategy is based on using proprietary data and lending models to improve risk assessment and automate the credit process. According to Gu, better risk separation can allow lenders to approve more borrowers at similar loss rates or achieve lower losses at comparable approval rates.

Focus shifts to profitability and capital efficiency Gu, who recently became CEO after co-founding the company 14 years ago, said Upstart spent much of its first decade building its technology, repayment-data set and relationships with capital providers, rating agencies, banks and regulators. He said those efforts were necessary to demonstrate that its lending models could perform over the multiyear life of loans.

Why Upstart’s Bank Charter Bet Could Change EverythingIn 2026, management has narrowed its priorities around contribution profit, which Gu called the company’s best measure of operating progress. He said the second quarter provided evidence of the strategy, with contribution profit reaching a record level that exceeded the company’s fourth-quarter 2021 result despite what he described as less favorable macroeconomic conditions.

Gu said personal-loan originations increased 23% sequentially in the second quarter, representing approximately $760 million in growth. He added that Upstart’s balance-sheet loans declined to nearly a two-year low as a percentage of total loans outstanding, while third-party capital funded most of the growth.

“We did 23% sequential growth,” Gu said. “We did that while predominantly funding that with third-party funding.”

He said the company’s core personal-loan operation remains a key strategic focus because of its margins and competitive differentiation. While Upstart has also invested in broader products and markets, Gu said management’s focus on the core personal-loan business helped drive growth and contribution profit in the second quarter.

Gu reiterated the company’s longer-term expectation for a 35% compounded growth rate over the next several years, while noting that macroeconomic conditions can influence results. He said Upstart’s top priority remains “do credit right,” meaning growth must be balanced against credit performance.

Home and auto products target contribution profitability Upstart’s newer home and auto lending products expanded their contribution margins by 61 percentage points in the second quarter, according to Gu. He said the businesses are not yet contribution profitable, but management expects them to reach that point by the end of the year.

The improvement followed a shift in emphasis from proving borrower and investor demand to demonstrating unit economics. Gu said the company is targeting lower operating costs and more sophisticated pricing, or take-rate, optimization in the secured-lending products.

For HELOCs, he said verification costs and complexity are higher than for personal loans because of processes involving property liens and related documentation. Upstart sees opportunities to increase automation in those workflows.

In auto lending, Gu said the company is seeking to tailor economics more closely to the value it provides in individual dealership transactions. In some cases, he said, Upstart may be the only available financing source because of its ability to assess a borrower’s risk; in others, it competes in a more price-sensitive market.

Gu said home and auto could continue improving beyond break-even as Upstart adds value for borrowers, though he characterized that as a longer-term process.

Macro conditions offset operating execution Bank of America analyst Mihir Bhatia asked why Upstart maintained its full-year guidance despite an increase in UMI, a company metric tied to the macroeconomic environment and expected credit defaults. Gu said each five-point change in UMI can affect originations by roughly 5% to 10%, with revenue and contribution profit generally moving proportionately.

Gu said stronger execution in areas within Upstart’s control—including lending models, user experience, automation and customer reach—was offset by the macro headwind. He said the company likely would have raised guidance if UMI had remained in a lower portion of its previously anticipated range.

On a question about a 2024 loan vintage that appeared to be underperforming targets, Gu said overall credit performance has been strong and that variation between loan vintages is normal. He said changes in UMI can create tailwinds or headwinds for loans originated at different times, since the metric is correlated with default rates.

Investors weigh operating expenses, bank plans and cash use Gu acknowledged investor questions about operating expenses, capital needs and Upstart’s planned bank. He said operating costs have increased partly because of investments in new areas, but added that “the lion’s share” of that expense growth has occurred and that the growth rate in costs should slow considerably during the rest of the year.

Upstart has said it believes it has sufficient capitalization to open Upstart Bank early next year, according to Gu. He said the bank should be operationally and economically accretive by enabling the company to reach more states and extend more offers.

Gu also said the company views capital held on its balance sheet and in co-investment arrangements as a necessary part of its funding infrastructure rather than the primary driver of value. He said Upstart’s value should instead be measured by the growth of contribution profit, primarily fee revenue, and by the efficiency with which it uses equity capital.

Discussing capital allocation, Gu said Upstart had considered repurchasing convertible debt but concluded its stock offered a higher expected internal rate of return. He said the company will continue to weigh internal investment, stock repurchases and other uses of capital based on expected returns, while preserving sufficient cash for initiatives including the bank launch.

Gu also highlighted Cash Line, a newer product aimed at financially stressed consumers. He said the offering has shown strong customer demand but remains early in development, with further work needed on funding, credit calibration and unit economics.

About Upstart (NASDAQ:UPST)Upstart Holdings, Inc operates a cloud-based lending marketplace that leverages artificial intelligence and machine learning to assess borrower creditworthiness. The company partners with banks and credit unions, providing its proprietary AI models and underwriting platform to facilitate consumer credit products. By focusing on non‐traditional data points—such as education, employment history and other real‐time indicators—Upstart seeks to improve approval rates and lower loss rates compared with conventional credit scoring methods.

Upstart's core offering centers on unsecured personal loans, which borrowers can use for purposes such as debt consolidation, home improvements or major purchases.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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The timing can certainly be debated, but I think the artificial intelligence (AI) boom began in November 2022, when OpenAI released ChatGPT, which amassed 100 million users in just two months. However, many companies were developing and even successfully monetizing AI long before that moment.

Upstart (UPST +0.22%) has developed AI models to assess the creditworthiness of potential borrowers for its lending partners since 2014. In many cases, those models are more reliable than the best human-led assessment methods, which still rely on Fair Isaac's FICO credit scoring system.

Upstart's revenue soared during the first half of 2026, and yet its stock is down almost 35% for the year (as of Aug. 12). I think the market is too pessimistic. Here's why I predict the stock will double by the time we enter 2027.

Image source: Getty Images.

Upstart's AI assessment methods are transformational Upstart's AI algorithm considers more than 2,500 data points to determine a potential borrower's creditworthiness, and it can do so almost in real time to deliver rapid decisions. It would take a human assessor days or even weeks to process an equivalent amount of data. Moreover, the FICO credit scoring system that most banks rely upon only considers five key metrics, including a person's existing debts and repayment history.

Upstart's AI-powered approach is proving superior in practice because its underwriting model is now 2.74 times as accurate as a traditional credit model, and it's constantly improving as it ingests more data. The result is a better overview of the risk posed by each loan to the bank that originates the loan, potentially leading to higher approval rates and more suitable interest rates for each borrower. That is why a growing number of banks turn to the company to assess loan applicants.

Upstart approved a record 558,014 loans worth $4.2 billion during the second quarter, and both numbers grew by 50% year over year. Unsecured personal loans continued to be the company's bread and butter, accounting for $3.6 billion of that total. But originations in the secured category -- which includes car loans and home equity lines of credit (HELOCs) -- soared by 218% to a record $589 million.

Those numbers are a drop in the bucket compared to Upstart's long-term opportunity. Chairman Dave Girouard believes AI will replace human-driven loan assessment methods during the next decade, leaving $25 trillion in global originations and $1 trillion in fee revenue on the table for the companies that are leading the transition.

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Rapid revenue and earnings growth Upstart doesn't lend its own money to consumers, except in some cases where it's conducting research and development. It gets paid a fee by banks and other funding partners to use its AI technology to originate loans on their behalf, so it has a relatively low-risk business model.

The company generated $364.7 million in revenue during the second quarter, a robust 42% increase from the year-ago period. It also delivered $16.5 million in generally accepted accounting principles (GAAP) net income, nearly triple its year-ago result of $5.6 million.

Upstart also generated $76.9 million in adjusted (non-GAAP) earnings before interest, tax, depreciation, and amortization (EBITDA) in the second quarter, up 45%. This is the company's preferred measure of profitability because it excludes one-off and noncash expenses such as stock-based compensation.

Simply put, Upstart is growing quickly and profitably, which isn't always easy.

Why Upstart stock could double by 2027 Aside from Upstart's consistently strong operating performance, its valuation is the other big reason I think its stock could double during the next few months. It's trading at a price-to-sales (P/S) ratio of just 2.6 as I write this, far below its three-year average of 5.5.

Further, management forecasts $1.4 billion in total annual revenue for 2026, placing Upstart stock at a forward P/S ratio of 2.1.

UPST PS Ratio data by YCharts

That suggests Upstart stock would have to soar by 162% by the end of this year just to match its three-year average P/S ratio of 5.5. In my opinion, the stock is trading at a discount right now because interest rates may rise during over the next few months, which could slow the economy and reduce consumer demand for credit. However, Upstart proved its ability to navigate high interest rates in 2022 and 2023, and its business emerged stronger than ever.

If rates don't rise, I think investor sentiment will improve, and the stock will have an easier path to double from here. In any case, I currently own the stock myself, and I don't plan to sell before the end of 2026.

Upstart Holdings, Inc. (UPST) Presents at Bank of America SMID Cap Virtual Conference Transcript

Upstart (UPST +4.64%) stock dropped 23% in July, according to data provided by S&P Global Market Intelligence. There was macroeconomic data pointing to continued pressure for lenders, which is its core business, as well as continued concern about agentic artificial intelligence (AI) replacing software-as-a-service (SaaS) products.

Upstart is in for a long recovery Upstart stock plunged several years ago when it couldn't sustain incredibly high growth as interest rates rose, and it hasn't gotten back on its feet yet. The business has somewhat recovered, but it's not where it used to be. It's also facing a tough macroeconomic environment, hampering market confidence in its future.

Image source: Getty Images.

On top of that, the market has soured on many SaaS stocks in the age of agentic AI. The worry is that agents can perform many of the tasks that these companies take care of. Upstart is an AI-based credit evaluation platform, and it claims to approve more loans without adding risk to the lender. It uses machine learning and thousands of data points to continually improve, offering real value to its clients, and it says its underwriting model has been 2.74 times as good as traditional models over the past eight years. The fear is that agents can do this just as well.

So far, Upstart continues to make its way back up, and it has been demonstrating solid performance over the past few quarters. In the 2026 second quarter, revenue increased 42% year over year, and originations were up 50%. Net income nearly tripled to $16.5 million, but Upstart has been in and out of generally accepted accounting principles (GAAP) profitability for several quarters.

The future still looks bright The company is still well-positioned to keep growing. Management is targeting a 40% revenue increase for the 2026 full year, and it also provided longer-term guidance of a 35% compound annual growth rate through 2028.

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It continues to expand, and new products present new opportunities. It has added auto loans and home loans to its original, core personal lending products, and its secured auto and home loan originations increased 218% year over year in the second quarter. Management says that it has reduced the cost of its home equity product by 15%, and that it can be approved in six days with a price advantage of two percentage points vs. competitors.

It has also signed several funding rounds for its loans so it's keeping a small amount on its books. That reduces its direct exposure to high interest rates.

Upstart stock rose after earnings, but the stock is still well off its high as the market weighs its performance against its risks.

Shares of Upstart (UPST +3.35%) were moving higher today after the AI-driven loan origination platform posted better-than-expected results in its second-quarter earnings report.

As of 10:22 a.m. ET, the stock was up 6.6% after gaining as much as 13.8% earlier in the session.

Image source: Getty Images.

Upstart impresses across the board Upstart delivered another round of solid growth, with originations rising 50% to $4.2 billion and loans originated up 50% to 558,014.

Revenue rose 42% in the period to $364.7 million, which topped estimates at $351.5 million. Revenue from fees, which represents the core business, rose 45% to $348 million.

Upstart also delivered solid profitability improvements with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rising 45% to $76.9 million. Generally accepted accounting principles (GAAP) earnings per share increased from $0.05 to $0.16, as operating expenses grew slightly slower than revenue.

The company also made progress toward profitability in its emerging secured loan business, which includes auto and home loans.

CEO Paul Gu said, "We came into this quarter with a clear plan, and we executed it -- reaccelerating growth in core personal loans, moving our secured products rapidly toward profitability, and funding that growth without adding equity capital."

Today's Change

(

3.35

%) $

1.02

Current Price

$

31.34

What's next for Upstart The company maintained its full-year guidance, calling for revenue of $1.4 billion and adjusted EBITDA of $294 million.

That's likely a conservative forecast as it's below the run rate the company achieved in both categories in the second quarter, but it accounts for a slower first quarter. The lack of a rise in guidance may have restrained the stock's gains.

Upstart has struggled to win over investors and has underperformed the market recently as the business faces a number of risks, including rising interest rates and ensuring that its loans are funded.

However, if the company continues to deliver results like these, with surging GAAP profits, the stock should eventually break out of its funk.

By PYMNTS  |  August 5, 2026

 | 

Digital lender Upstart saw loan originations jump 50% as it prepares to launch its bank.

The company reported earnings Tuesday (Aug. 5) showing revenues of $365 million, a 42% increase over the same quarter in 2025. Loan originations came to $4.2 billion, with Upstart originating a record 558,000.

During an earnings call, CEO Paul Gu characterized the results as evidence of the company’s technological advantage, reminding analysts of his contention on an earlier call that “core personal loans are our superpower.” He added that the company’s technology lead in that segment generates “unusually strong margins.”

Upstart said it is increasingly shifting away from a one-time transactional model toward a broader relationship with the American consumer. Approximately 1 in 13 American adults now has an account with Upstart, according to the company.

Management noted that while the company had once focused on a conversion rate for one-time loans, it is now prioritizing the lifecycle of the borrower. Gu added that the company is less focused on FICO scores as a lending metric.

“We’re really serving a pretty full spectrum of people that are just new to credit or trying to repair their credit, all the way to people who are really prime and can qualify for really great rates, have a home,” he said.

“We’re getting that full spectrum. One of the things you may see in our earnings materials is that we like to note that we’re going to be replacing the conversion rate metric and sunsetting that particular one just because it’s so sensitive to the mixes that it’s a little hard to interpret. That’s what I would say about it is we’re serving a pretty full spectrum.”

Meanwhile, management said Upstart has moved its underwriting to a new distributed inference platform that processes applications 65% faster. Gu said the company’s models are now 2.74 times as accurate as traditional credit scoring benchmarks.

The company is applying automation to more complex products as well. Upstart can now close a home equity line of credit (HELOC) loan in six days, whereas traditional banks often take weeks or months, said Gu.

The earnings follow Upstart’s announcement last month that it had received conditional approval from the Office of the Comptroller of the Currency (OCC) to establish a bank called Upstart Bank, N.A.

Andrea Blankmeyer, Upstart’s chief financial officer, said the lender expects to “pretty quickly move the bulk to all of our originations through to Upstart Bank from the current partners that we’re originating with today.”

She added that the company expects “the core elements of the operations of the bank to be up and running relatively shortly after the launch of the bank.”

BURLINGAME, Calif.--(BUSINESS WIRE)--Upstart Holdings, Inc. (NASDAQ: UPST), the leading artificial intelligence (AI) lending marketplace, today announced financial results for the quarter ended June 30, 2026. Upstart will host a conference call and webcast at 1:30 p.m. Pacific Time today. An earnings presentation and link to the webcast are available at ir.upstart.com.

“We came into this quarter with a clear plan, and we executed against it — re-accelerating growth in core personal loans, moving our secured products rapidly toward profitability, and funding that growth without adding equity capital. The results speak for themselves: originations up 50% year-over-year and we returned to GAAP profitability, with an all-time-high Contribution Profit,” said Paul Gu, Co-founder and CEO. “We've built a technology advantage that keeps compounding, and we've barely scratched the surface of the opportunity in front of us.”

Second Quarter 2026 Highlights

Originations: $4.2 billion, up 50% year-over-year (“YoY”). 558,014 loans originated, up 50% YoY. Total Revenue: $365 million, up 42% YoY. Revenue from fees was $348 million, up 45% YoY. Income from Operations: $14.6 million, compared to $4.5 million in Q2 2025. Net Income: $16.5 million, up 195% YoY from $5.6 million in Q2 2025. Diluted net income per share was $0.16 compared with $0.05 in Q2 2025. Contribution Profit: All-time high of $193 million, up 37% YoY. Contribution Margin was 55%, versus 58% in Q2 2025. Adjusted EBITDA: $76.9 million, up 45% YoY from $53.1 million in Q2 2025. Adjusted EBITDA Margin was 21%, unchanged from Q2 2025. Results by Product Category1

Unsecured: Revenue from fees was $326 million, up 38% YoY. Contribution Profit of $201 million was up 36% YoY, while Contribution Margin was 62%, unchanged from Q2 2025 and up 6 percentage points from 56% in Q1 2026. Secured (Auto and Home): Combined Contribution Margin was negative 35%, improved from negative 176% in Q2 2025 and up 61 percentage points from negative 96% in Q1 2026. Financial Outlook

For full-year 2026, Upstart continues to expect:

Total Revenue of approximately $1.4 billion Revenue From Fees of approximately $1.3 billion Adjusted EBITDA (Margin % of Total Revenue) of approximately $294 million (21%) Conference Call and Webcast Information

Live Conference Call and Webcast at 1:30 p.m. PT on August 4, 2026. To access the call in the United States and Canada: 800-330-6710, conference code 7744842. To access the call outside of the United States and Canada: +1 312-471-1353, conference code 7744842. A webcast is available at ir.upstart.com. Event Replay: A webcast of the event will be archived for one year at ir.upstart.com. About Upstart

Upstart (NASDAQ: UPST) is the leading AI lending marketplace, connecting millions of consumers to more than 100 banks and credit unions that leverage Upstart’s AI models and cloud applications to deliver superior credit products. With Upstart AI, lenders can approve more borrowers at lower rates while delivering the exceptional digital-first experience customers demand. More than 90% of loans are fully automated, with no human intervention by Upstart. Founded in 2012, Upstart’s platform includes personal loans, automotive loans, home equity lines of credit, and Upstart’s new Cash Line product, a revolving line of credit. Upstart is based in Burlingame, California.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, statements regarding our outlook for the full-year of 2026 and beyond. These statements may include words such as “anticipate”, “becoming”, “believe”, “can have”, “continue”, “could”, “estimate”, “expect”, “intend”, “likely”, “look forward”, “may”, “ongoing,” “plan”, “potential”, “predict”, “project”, “should”, “target”, “will”, “would,” or the negative of these terms or other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events that do not relate strictly to historical or current facts. Forward-looking statements give our current expectations and projections relating to our financial condition; macroeconomic factors; plans; objectives; product development; growth opportunities and the sustainability of our business and market position; assumptions; risks; future performance; business; investments; and results of operations, including revenue (including revenue from fees and net interest income (loss)), contribution margin, net income (loss), Adjusted EBITDA, basic weighted-average share count, and diluted weighted-average share count. Forward-looking statements are based on information available at the time those statements are made or management’s good faith beliefs and assumptions as of that time with respect to future events, including assumptions regarding macroeconomic conditions, credit performance, funding availability, and competitive dynamics, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in, or suggested by, the forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results. Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

More information about factors that could affect our results of operations and risks and uncertainties are provided in our public filings with the Securities and Exchange Commission (the “SEC”), including “Risk Factors” in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained by visiting our investor relations website at ir.upstart.com or the SEC’s website at www.sec.gov. These risks and uncertainties include, but are not limited to, our ability to manage the adverse effects of macroeconomic conditions and disruptions in the banking sector and credit markets, including inflation and related changes in interest rates and monetary policy; our ability to access sufficient loan funding, including through securitizations, committed capital and other co-investment arrangements, whole loan sales, and warehouse credit facilities; the effectiveness of our credit decisioning models and risk management efforts, including reflecting the impact of macroeconomic conditions on borrowers' credit risk; our ability to retain existing, and attract new, lending partners; our future growth prospects and financial performance; our ability to manage risks associated with the loans on our balance sheet; our ability to improve and expand our platform and products; and our ability to operate successfully in a highly-regulated industry. Moreover, we operate in very competitive and rapidly changing environments, and new risks may emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Additional information will be available in other future reports that we file with the SEC from time to time, which could cause actual results to vary from expectations.

Key Operating Metrics and Non-GAAP Financial Measures

Beginning in the second quarter of 2026, we refer to the metrics “Transaction Volume, Dollars” and “Transaction Volume, Number of Loans” as “Originations, Dollars” and “Originations, Number of Loans,” respectively, to reflect management’s internal terminology. We define Originations, Dollars as the aggregate of: (i) the total principal of loan originations for personal loans, small dollar loans, and auto loans, (ii) committed amounts for HELOCs, and (iii) drawn amounts for unsecured revolving credit lines (Cash Line), in each case facilitated on our marketplace during the periods presented. We define Originations, Number of Loans as the total number of such originations, commitments, and draws, as applicable, facilitated on our marketplace during the periods presented. We believe these metrics are good proxies for our overall scale and reach as a marketplace.

We define Conversion Rate as the Originations, Number of Loans in a period divided by the total number of rate inquiries received that we estimate to be legitimate, which we record when a borrower actively requests a loan offer on our platform. We track this metric to understand the impact of improvements to the efficiency of our borrower funnel on our overall growth. Cash Line is excluded because those borrowers may make multiple draws after the line has been initially approved, and those subsequent draws do not represent additional conversions.

We define Percentage of Loans Fully Automated as the total number of loans in a given period originated end-to-end with no human involvement required by the Company divided by the Originations, Number of Loans in the same period. Cash Line is excluded because those borrowers may make multiple draws after the line has been initially approved, and those subsequent draws do not represent additional automation. Under this definition, “originated end-to-end” means (i) from initial rate request to final funding for personal loans, including small dollar loans, and (ii) from initial rate request to loan approval for auto loans and HELOCs, due to certain jurisdictions’ local requirements and external dependencies that require human action prior to funding.

To derive Contribution Profit, we subtract the sum of borrower acquisition costs as well as borrower verification and servicing costs from revenue from fees, net. To calculate Contribution Margin we divide Contribution Profit by revenue from fees, net.

We calculate Adjusted EBITDA as net income (loss) adjusted to exclude stock-based compensation expense and certain payroll tax expenses, depreciation and amortization, expense on convertible notes, provision for income taxes, gain on debt extinguishment, net gain on lease modification and reorganization expenses, as applicable. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenue. Adjusted EBITDA and Adjusted EBITDA Margin include interest expense from corporate debt and warehouse credit facilities which is incurred in the course of earning corresponding interest income.

Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included below. Upstart has not reconciled the forward-looking non-GAAP measures to comparable forward-looking GAAP measures because of the potential variability and uncertainty of incurring these costs and expenses in the future. Accordingly, a reconciliation is not available without unreasonable effort.

  Upstart Holdings, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

  December 31,

June 30,

2025

2026

Assets

Cash and cash equivalents

$

652,388

$

455,957

Restricted cash

404,624

526,320

Loans (at fair value)(1)

984,552

1,064,239

Property, equipment, and software, net

44,174

49,421

Operating lease right of use assets

16,410

18,783

Beneficial interest assets (at fair value)

396,216

545,938

Line of credit receivable (at fair value)

112,742

111,772

Notes receivable and residual certificates (at fair value)

97,416

120,375

Non-marketable equity securities

41,250

41,000

Goodwill

67,062

67,062

Other assets (includes $41,166 and $54,946 at fair value as of December 31, 2025 and June 30, 2026, respectively)

157,971

170,406

Total assets

$

2,974,805

$

3,171,273

Liabilities and Stockholders’ Equity

Liabilities:

Payable to investors

$

107,659

$

145,208

Borrowings

1,829,145

2,003,129

Payable to securitization note holders (at fair value)

46,542

32,122

Accrued expenses and other liabilities (includes $15,219 and $24,967 at fair value as of December 31, 2025 and June 30, 2026, respectively)

171,495

170,974

Operating lease liabilities

21,149

22,352

Total liabilities

2,175,990

2,373,785

Stockholders’ equity:

Common stock, $0.0001 par value; 700,000,000 shares authorized; 98,033,361 and 97,306,813 shares issued and outstanding as of December 31, 2025 and June 30, 2026, respectively

10

10

Additional paid-in capital

1,156,361

1,145,141

Accumulated deficit

(357,556

)

(347,663

)

Total stockholders’ equity

798,815

797,488

Total liabilities and stockholders’ equity

$

2,974,805

$

3,171,273

Upstart Holdings, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income

(In thousands, except share and per share data)

(Unaudited)

  Three Months Ended
June 30,

Six Months Ended
June 30,

2025

2026

2025

2026

Revenue:

Revenue from fees, net(1)

$

240,777

$

348,019

$

426,252

$

625,082

Interest income, interest expense, and fair value adjustments, net:

Interest income(3)

45,623

57,051

86,191

113,112

Interest expense(3)

(7,772

)

(12,531

)

(14,792

)

(22,901

)

Fair value and other adjustments, net(4)

(21,337

)

(27,831

)

(26,989

)

(42,371

)

Total interest income, interest expense, and fair value adjustments, net

16,514

16,689

44,410

47,840

Total revenue

257,291

364,708

470,662

672,922

Operating expenses:

Sales and marketing

73,105

114,512

132,075

218,967

Customer operations

46,246

61,319

86,747

116,414

Engineering and product development

68,825

93,860

126,663

173,972

General, administrative, and other

64,573

80,378

125,131

156,448

Total operating expenses

252,749

350,069

470,616

665,801

Income from operations

4,542

14,639

46

7,121

Other income, net

1,114

2,514

3,192

3,470

Net income before income taxes

5,656

17,153

3,238

10,591

Provision for income taxes

49

614

78

698

Net income

$

5,607

$

16,539

$

3,160

$

9,893

Net income per share, basic

$

0.06

$

0.17

$

0.03

$

0.10

Net income per share, diluted

$

0.05

$

0.16

$

0.03

$

0.10

Weighted-average number of shares outstanding used in computing net income per share, basic

95,526,364

96,573,751

94,903,909

96,736,956

Weighted-average number of shares outstanding used in computing net income per share, diluted

102,852,284

109,720,846

103,177,583

101,414,541

Upstart Holdings, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income

(In thousands, except share and per share data)

(Unaudited)

  Three Months Ended
June 30,

Six Months Ended
June 30,

2025

2026

2025

2026

Revenue from fees, net:

Platform and referral fees, net

$

202,845

$

284,066

$

353,820

$

508,684

Servicing and other fees, net

37,932

54,807

72,432

103,919

Loan sales fees(2)

—

9,146

—

12,479

Total revenue from fees, net

$

240,777

$

348,019

$

426,252

$

625,082

Three Months Ended
June 30,

Six Months Ended
June 30,

2025

2026

2025

2026

Fair value and other adjustments, net:

Unrealized loss on loans, loan charge-offs, and other fair value adjustments, net

$

(18,878

)

$

(15,586

)

$

(40,204

)

$

(33,773

)

Fair value adjustments and realized gains (losses) on beneficial interests, net

(6,288

)

(8,407

)

11,377

4,727

Realized gain (loss) on sale of loans, net

3,829

(3,838

)

1,838

(13,325

)

Total fair value and other adjustments, net

$

(21,337

)

$

(27,831

)

$

(26,989

)

$

(42,371

)

  Upstart Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

  Six Months Ended

June 30,

2025

2026

Cash flows from operating activities

Net income

$

3,160

$

9,893

Adjustments to reconcile net income to net cash used in operating activities

Change in fair value of loans

(21,064

)

74,118

Change in fair value of servicing assets

8,640

12,535

Change in fair value of servicing liabilities

(623

)

(1,566

)

Change in fair value of beneficial interest assets

(23,484

)

(9,286

)

Change in fair value of beneficial interest liabilities

12,107

4,559

Change in fair value of other financial instruments

(2,384

)

(1,227

)

Stock-based compensation

65,342

79,277

Gain on loan servicing rights, net

(12,451

)

(20,844

)

Depreciation and amortization

12,243

12,984

Loan premium amortization

(19,176

)

(23,126

)

Non-cash interest expense and other

3,003

8,217

Net changes in operating assets and liabilities:

Purchases and originations of loans held-for-sale

(3,969,799

)

(6,049,875

)

Proceeds from sale of loans held-for-sale

3,723,733

5,532,144

Principal payments received for loans held-for-sale

83,138

95,627

Principal payments received for loans held by consolidated securitization

19,933

15,142

Settlements of beneficial interest liabilities, net

(11,664

)

524

Proceeds from beneficial interest assets (derivatives)

806

10,536

Settlements of beneficial interest assets (derivatives)

(1,023

)

(3,123

)

Other assets

4,064

(5,083

)

Operating lease liability and right-of-use asset

(610

)

(1,170

)

Accrued expenses and other liabilities

(7,539

)

(10,185

)

Net cash used in operating activities

(133,648

)

(269,929

)

Cash flows from investing activities

Purchases and originations of loans held-for-investment

$

(377,940

)

$

(617,215

)

Proceeds from sale of loans held-for-investment

20,247

435,726

Principal payments received for loans held-for-investment

129,941

158,019

Principal payments received for notes receivable and repayments of residual certificates

6,521

27,054

Acquisition and settlements of beneficial interest assets (hybrid instruments)

(1,576

)

(3,197

)

Proceeds from beneficial interest assets (hybrid instruments)

44,929

107,165

Issuance of line of credit receivable

—

(721

)

Repayments of line of credit receivable

—

1,369

Purchases of property and equipment

(115

)

(4,808

)

Capitalized software costs

(10,410

)

(8,434

)

Net cash provided by (used in) investing activities

(188,403

)

94,958

Cash flows from financing activities

Proceeds from borrowings

$

176,356

$

424,550

Payment of debt issuance costs to third parties

(443

)

—

Repayments of borrowings

(152,691

)

(253,833

)

Principal payments made on securitization notes

(22,021

)

(14,149

)

Payable to investors

31,496

37,549

Net proceeds related to stock-based award activities

14,551

6,176

Repurchases of stock

—

(100,057

)

Net cash provided by financing activities

47,248

100,236

Change in cash, cash equivalents and restricted cash

(274,803

)

(74,735

)

Cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

976,263

1,057,012

Cash, cash equivalents and restricted cash at end of period

$

701,460

$

982,277

  Upstart Holdings, Inc.

Key Operating and Non-GAAP Financial Metrics

(In thousands, except per share data and ratios, or as noted)

(Unaudited)

  Three Months Ended
June 30,

Six Months Ended
June 30,

2025

2026

2025

2026

Originations, Dollars(1)

$

2,820,398

$

4,227,174

$

4,954,006

$

7,672,316

Originations, Number of Loans(1)(2)

372,599

558,014

613,305

983,370

Conversion Rate(3)

21.0

%

19.7

%

19.4

%

19.2

%

Percentage of Loans Fully Automated

92

%

91

%

92

%

91

%

Contribution Profit

$

140,543

$

193,131

$

242,915

$

330,405

Contribution Margin

58

%

55

%

57

%

53

%

Adjusted EBITDA

$

53,053

$

76,905

$

95,630

$

117,374

Adjusted EBITDA Margin

21

%

21

%

20

%

17

%

  The following table provides disaggregated information for Originations, Dollars and Originations, Number of Loans for the periods presented:

  Three Months Ended

June 30,

Six Months Ended

June 30,

2025

2026

2025

2026

Originations, Dollars

Unsecured Lending(1)

$

2,635,470

$

3,638,446

$

4,663,625

$

6,677,530

Other(2)

184,928

588,728

290,381

994,786

Total

$

2,820,398

$

4,227,174

$

4,954,006

$

7,672,316

Originations, Number of Loans(3)

Unsecured Lending(1)

366,423

535,191

603,624

946,045

Other(2)

6,176

22,823

9,681

37,325

Total

372,599

558,014

613,305

983,370

Upstart Holdings, Inc.

Key Operating and Non-GAAP Financial Metrics

(In thousands, except per share data and ratios, or as noted)

(Unaudited)

  The following table presents financial information, including Contribution Profit, for our Unsecured Lending segment:

  Three Months Ended

June 30,

Six Months Ended

June 30,

2025

2026

2025

2026

Unsecured Lending(1)

Revenue from fees, net

$

236,935

$

326,301

$

419,062

$

591,695

Borrower acquisition costs(2)

(57,249

)

(84,712

)

(102,390

)

(165,091

)

Borrower verification and servicing costs(3)

(32,366

)

(40,821

)

(61,640

)

(77,402

)

Contribution Profit for Unsecured Lending

$

147,320

$

200,768

$

255,032

$

349,202

The following table presents a reconciliation of total Contribution Profit to Net income before income taxes:

  Three Months Ended

June 30,

Six Months Ended

June 30,

2025

2026

2025

2026

Contribution Profit - Unsecured Lending

$

147,320

$

200,768

$

255,032

$

349,202

Reconciling items:

Contribution Profit/(Loss) - Other Segments(1)

(6,777

)

(7,637

)

(12,117

)

(18,797

)

Sales and marketing, net of borrower acquisition costs(2)

(12,170

)

(12,228

)

(22,578

)

(24,426

)

Customer operations, net of borrower verification and servicing costs(3)

(6,947

)

(8,715

)

(12,907

)

(16,278

)

Engineering and product development

(68,825

)

(93,860

)

(126,663

)

(173,972

)

General, administrative, and other

(64,573

)

(80,378

)

(125,131

)

(156,448

)

Interest income, interest expense, and fair value adjustments, net

16,514

16,689

44,410

47,840

Other income, net

1,114

2,514

3,192

3,470

Net income before income taxes

$

5,656

$

17,153

$

3,238

$

10,591

Upstart Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data and ratios, or as noted)

(Unaudited)

  Three Months Ended
June 30,

Six Months Ended
June 30,

2025

2026

2025

2026

Revenue from fees, net

$

240,777

$

348,019

$

426,252

$

625,082

Income from operations

4,542

14,639

46

7,121

Operating Margin

2

%

4

%

0

%

1

%

Sales and marketing, net of borrower acquisition costs(1)

$

12,170

$

12,228

$

22,578

$

24,426

Customer operations, net of borrower verification and servicing costs(2)

6,947

8,715

12,907

16,278

Engineering and product development

68,825

93,860

126,663

173,972

General, administrative, and other

64,573

80,378

125,131

156,448

Interest income, interest expense, and fair value adjustments, net

(16,514

)

(16,689

)

(44,410

)

(47,840

)

Contribution Profit

$

140,543

$

193,131

$

242,915

$

330,405

Contribution Margin

58

%

55

%

57

%

53

%

Upstart Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data and ratios, or as noted)

(Unaudited)

  Three Months Ended

June 30,

Six Months Ended

June 30,

2025

2026

2025

2026

Total revenue

$

257,291

$

364,708

$

470,662

$

672,922

Net income

5,607

16,539

3,160

9,893

Net Income Margin

2

%

5

%

1

%

1

%

Adjusted to exclude the following:

Stock-based compensation and certain payroll tax expenses(1)

$

36,641

$

45,881

$

70,277

$

81,993

Depreciation and amortization

5,843

7,126

12,243

12,984

Reorganization expenses

—

1,678

—

1,678

Expense on convertible notes

4,913

5,067

9,872

10,128

Provision for income taxes

49

614

78

698

Adjusted EBITDA

$

53,053

$

76,905

$

95,630

$

117,374

Adjusted EBITDA Margin

21

%

21

%

20

%

17

%

More News From Upstart Holdings, Inc.

MarketBeat Week in Review – 03/30 - 04/03Upstart NASDAQ: UPST reported second-quarter 2026 results marked by accelerating loan originations, higher contribution margins and a return to GAAP profitability, while reaffirming its full-year financial outlook despite a higher macroeconomic risk indicator.

Chief Executive Officer Paul Gu said the company executed on priorities outlined last quarter: reaccelerating its core personal-loan business, improving the profitability of its Home and auto products, and expanding third-party funding without raising equity capital.

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Upstart Surges on Record Revenue but Wall Street Remains DividedTotal originations reached $4.2 billion, up 50% from a year earlier and 23% sequentially. Core personal-loan originations increased 27% from the first quarter, or by $526 million, while total unsecured-lending originations rose 38% year over year and 20% sequentially. Upstart changed the name of its sole reportable segment to unsecured lending from personal lending; the change was administrative and did not alter disclosures.

Revenue, margins and profitability improve Revenue totaled approximately $365 million, an increase of 42% year over year and 18% from the prior quarter. Fee revenue was $348 million, rising 45% from a year earlier and 26% sequentially. Unsecured lending generated $326 million of fee revenue, while secured products, consisting of Home and auto offerings, produced $22 million.

Why Upstart’s Bank Charter Bet Could Change EverythingChief Financial Officer Andrea Blankmeyer said fee-revenue growth exceeded origination growth because take rates improved in both categories. Unsecured take rate improved by about 24 basis points sequentially, while secured take rate increased by 81 basis points. Blankmeyer attributed unsecured improvement largely to a greater mix of higher-margin core personal loans and seasonal demand, while noting that the company is focused on contribution profit rather than maximizing take rates.

Contribution profit, defined by the company as fee revenue less variable costs for borrower acquisition, verification and servicing, reached a record $193 million. The figure was up 37% year over year and 41% from the first quarter. Total contribution margin was 55%, compared with 50% in the prior quarter.

Unsecured contribution margin was 62%, up six percentage points sequentially. Secured-products contribution margin improved to negative 35%, from negative 96% in the first quarter. GAAP net income was approximately $17 million, producing a 5% net income margin and diluted earnings per share of $0.16. Adjusted EBITDA was approximately $77 million, up 45% year over year, with a 21% margin. Blankmeyer said Upstart expects secured products to reach contribution-margin breakeven by the fourth quarter. The company said the improvement in those products reflected higher take rates and operational efficiencies across auto and Home lending.

Secured lending expands as Upstart sunsets auto refinance Auto originations increased 264% from a year earlier and 62% sequentially, while Home originations rose 139% year over year and 14% from the first quarter. Gu said auto and Home accounted for about 14% of total originations during the quarter, compared with approximately 1% in the fourth quarter of 2021.

In its Home business, the company said it reduced the cost to originate a home equity line of credit by 15% from the first quarter and can close HELOCs in six days. Gu said the company’s HELOC rates are, on average, more than 200 basis points below competitors’ rates. He added that Home-specific distribution partnerships have not yet been established but are on the company’s roadmap.

In auto lending, Upstart said it began optimizing take rates in its auto-purchase business and improved its ability to identify consumers with eligible vehicles for auto secured personal loans. However, the company decided to sunset its auto-refinance business. Gu said the product was relevant for returning customers but did not have the same growth velocity or potential as other investments.

Funding activity and bank plans Upstart said it closed three institutional funding deals since its May earnings call, including its largest-ever transaction, providing up to $5 billion in committed capacity. Year to date, the company has signed capital partnerships expected to add $10.8 billion in incremental capacity.

The company also completed an upsized $569 million asset-backed securitization, its largest issuance since 2021 and its tightest spreads in three years, according to Gu. Loans held on Upstart’s balance sheet ended the quarter at approximately $1.06 billion, up about $50 million sequentially. Yet those holdings represented 5.9% of total unpaid principal balance of Upstart loans outstanding, the lowest level in nearly two years.

Gu said the company has renewed every institutional capital partner since 2023. He said co-investment arrangements with funding partners are intended to secure longer-term committed capital rather than serve as a discount on loan sales.

Upstart received conditional approval from the Office of the Comptroller of the Currency in July for its bank charter. The company aims to launch Upstart Bank in early 2027 and said the bank is not expected to change its strategy of primarily using third-party capital to fund loans. Blankmeyer said Upstart believes it is sufficiently capitalized to launch the bank and expects to move the bulk of its loan originations through the bank relatively quickly after launch.

Outlook maintained amid higher UMI Upstart reiterated its full-year 2026 outlook for approximately $1.4 billion in total revenue, $1.3 billion in fee revenue and $294 million in adjusted EBITDA, representing roughly a 21% EBITDA margin.

The outlook assumes that the company’s UMI measure, which it uses to assess the macroeconomic credit environment, remains around 1.50 for the remainder of the year. Blankmeyer said UMI was 1.50 as of the day before the call, up 9% from the beginning of the second quarter and at the top end of the 1.40 to 1.50 range underpinning the company’s original annual guidance.

Management said the higher UMI creates a modest headwind for originations and fair-value marks, but it expects business execution to offset that pressure. Fixed operating expenses are expected to rise at a low-single-digit sequential rate in both the third and fourth quarters, following investments in secured products, technology infrastructure, model infrastructure and bank preparations.

About Upstart (NASDAQ:UPST)Upstart Holdings, Inc operates a cloud-based lending marketplace that leverages artificial intelligence and machine learning to assess borrower creditworthiness. The company partners with banks and credit unions, providing its proprietary AI models and underwriting platform to facilitate consumer credit products. By focusing on non‐traditional data points—such as education, employment history and other real‐time indicators—Upstart seeks to improve approval rates and lower loss rates compared with conventional credit scoring methods.

Upstart's core offering centers on unsecured personal loans, which borrowers can use for purposes such as debt consolidation, home improvements or major purchases.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Upstart Holdings, Inc. (UPST - Free Report) came out with quarterly earnings of $0.59 per share, beating the Zacks Consensus Estimate of $0.58 per share. This compares to earnings of $0.36 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of +1.72%. A quarter ago, it was expected that this company would post earnings of $0.39 per share when it actually produced earnings of $0.3, delivering a surprise of -23.08%.

Over the last four quarters, the company has surpassed consensus EPS estimates two times.

Upstart, which belongs to the Zacks Financial - Miscellaneous Services industry, posted revenues of $364.71 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.77%. This compares to year-ago revenues of $257.29 million. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Upstart shares have lost about 32.7% since the beginning of the year versus the S&P 500's gain of 11%.

What's Next for Upstart?While Upstart has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Upstart was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.63 on $364.43 million in revenues for the coming quarter and $2.25 on $1.43 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Miscellaneous Services is currently in the bottom 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Ridgepost Capital, Inc. (RPC - Free Report) , another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 5.

This company is expected to post quarterly earnings of $0.23 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 3.1% higher over the last 30 days to the current level.

Ridgepost Capital, Inc.'s revenues are expected to be $80.22 million, up 10.3% from the year-ago quarter.

Wall Street analysts expect Upstart Holdings, Inc. (UPST - Free Report) to post quarterly earnings of $0.58 per share in its upcoming report, which indicates a year-over-year increase of 61.1%. Revenues are expected to be $354.89 million, up 37.9% from the year-ago quarter.

The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe.

Before a company announces its earnings, it is essential to take into account any changes made to earnings estimates. This is a valuable factor in predicting the potential reactions of investors toward the stock. Empirical research has consistently shown a strong correlation between trends in earnings estimate revisions and the short-term price performance of a stock.

While investors typically use consensus earnings and revenue estimates as a yardstick to evaluate the company's quarterly performance, scrutinizing analysts' projections for some of the company's key metrics can offer a more comprehensive perspective.

Bearing this in mind, let's now explore the average estimates of specific Upstart metrics that are commonly monitored and projected by Wall Street analysts.

The combined assessment of analysts suggests that 'Revenue- Total interest income, interest expense, and fair value adjustments, net' will likely reach $24.80 million. The estimate points to a change of +50.2% from the year-ago quarter.

Analysts' assessment points toward 'Revenue- Revenue from fees, net' reaching $329.99 million. The estimate suggests a change of +37.1% year over year.

According to the collective judgment of analysts, 'Transaction Volume' should come in at $4.17 million. Compared to the present estimate, the company reported $2.82 million in the same quarter last year.

View all Key Company Metrics for Upstart here>>>

Over the past month, Upstart shares have recorded returns of -21.1% versus the Zacks S&P 500 composite's +0.2% change. Based on its Zacks Rank #3 (Hold), UPST will likely exhibit a performance that aligns with the overall market in the upcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Key Takeaways Dave offers the cleaner 2026 investment case, backed by focused growth, strong margins and credit control.CashAI supported 37% higher originations as Dave's 28-day past-due rate improved to 1.69%.Upstart has greater scale, but its 13% adjusted EBITDA margin shows weaker earnings quality. Dave Inc. (DAVE - Free Report) and Upstart Holdings, Inc. (UPST - Free Report) share the same core idea, which is that artificial intelligence can make consumer credit decisions faster, broader and more accurate than traditional methods. Both companies use proprietary models to judge risk, connect borrowers with financing and improve the customer experience through digital tools. They also depend on reliable funding partners and careful credit management to turn loan growth into durable profits.

However, Dave focuses on everyday banking customers who need short-term liquidity, then aims to deepen those relationships through checking, debit and installment products. Upstart runs a larger lending marketplace spanning personal loans, auto loans, home equity products and revolving credit.

Dave currently offers stronger margins and a tighter operating model, while Upstart brings more scale and product diversity. For investors, the better choice depends on execution, operating leverage, capital efficiency and the price investors are being asked to pay.

The Case for DAVEDave’s appeal starts with a focused customer journey. ExtraCash addresses an immediate need between paychecks, giving the company a way to attract members. Dave can then offer those users a checking account, debit card and eventually Dave Flex. Upstart serves more lending categories, but Dave’s narrower approach makes cross-selling easier to understand and measure.

CashAI is central to this model. Dave uses real-time transaction data rather than relying on traditional credit scores. The system has supported larger ExtraCash volumes while keeping losses controlled. In the first quarter, originations rose 37%, yet the 28-day past-due rate improved to 1.69%. That evidence matters because growth in short-term credit is only useful when repayment performance remains sound.

Dave also converts growth into profit more effectively than Upstart. Its adjusted EBITDA margin reached 44% compared with 13% for Upstart. Member growth and higher revenue per user supported that result, but the broader point is operating leverage: Dave’s digital platform can serve more activity without expenses rising at the same pace.

The Coastal Community Bank funding arrangement could improve the model further. Moving ExtraCash receivables toward an off-balance-sheet structure should release liquidity and reduce Dave’s direct funding burden. It also gives management more room to invest in customer acquisition, new products or share repurchases.

Dave still faces regulatory, partner and product-launch risks. Flex must prove that it can add spending without weakening credit quality. Even so, Dave combines a clear strategy, strong margins, improving underwriting results and a credible path toward a more capital-efficient business.

The Case for UPSTUpstart’s strength is breadth. Its AI platform supports unsecured personal loans, auto loans, home equity lines and the Cash Line. This gives lending partners access to several credit categories through one technology provider. Compared with Dave, this broader reach creates greater upside, but it also requires Upstart to manage more products, partners, funding channels and credit cycles.

The company also has scale. Upstart facilitated about $3.4 billion of originations in the first quarter, with personal loans providing the core volume. More than 90% of loans were fully automated, showing how its software can speed up borrower decisions.

Funding conditions have improved. Multi-year forward-flow commitments, securitizations, and relationships with banks and credit unions give Upstart several capital sources. Conditional approval to establish a national bank could eventually simplify operations and expand product reach, although further regulatory approvals are still required.

The concern is that stronger volume has not yet produced the same earnings quality seen at Dave. Upstart’s first-quarter adjusted EBITDA margin fell to 13%, contribution margin declined to 50%, and the company reported a GAAP net loss. Management expects margins to improve as spending moderates and newer products mature, but that outcome depends on execution and a stable credit environment.

Upstart remains an interesting AI lending platform with strong technology, broad product exposure and improved funding visibility. However, its business is more complex and more sensitive to lender demand, capital markets and consumer credit conditions.

How Do Estimates Compare for DAVE & UPST?The Zacks Consensus Estimate for Dave’s 2026 and 2027 sales implies year-over-year growth of 28.85% and 19.93%, respectively. The consensus mark for 2026 and 2027 EPS suggests a year-over-year increase of 27.47% and 28.63%, respectively. Over the past 30 days, estimates for DAVE’s 2026 and 2027 EPS have been revised upward.

For Dave:

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Upstart’s 2026 and 2027 sales calls for year-over-year growth of 36.53% and 30.61%, respectively. The consensus estimates for both 2026 and 2027 EPS have been revised marginally downward over the past 30 days. However, the figures suggest a year-over-year increase of 29.31% and 44.89%, respectively.

For Upstart:

Image Source: Zacks Investment Research

Price Performance and Valuation of DAVE & UPSTSo far in the year, Dave shares have surged 70%, while Upstart shares have declined 38.4%. In comparison, the S&P 500 composite has advanced 8.2% in the same time frame. 

Image Source: Zacks Investment Research

Following the share rally, DAVE is trading at a forward 12-month price-to-sales of 6.03X, which is above its one-year median of 4.54X. Meanwhile, UPST is presently trading at a forward 12-month price-to-sales of 1.54X, which is below its one-year median of 3.08X.

This indicates that investors already pay a large premium for Dave’s stronger margins, cleaner execution, and more focused model. Upstart’s lower ratio offers more room for upside if profitability improves, but it also reflects greater sensitivity to funding markets and credit conditions.

Image Source: Zacks Investment Research

ConclusionBoth companies have credible AI-driven lending models, but Dave presents the cleaner investment case today. Its focused customer strategy, improving credit results, high adjusted EBITDA margin and Coastal funding transition provide a stronger mix of growth and operating control. Upstart has broader products, rising originations, committed funding and a bank charter, yet profitability remains less consistent, and the model depends more heavily on external credit conditions.

Dave’s richer sales multiple raises the bar, so the stock is not low risk. Even so, it is the better name to add, while existing Upstart investors should stay patient rather than increase exposure.

DAVE has a Zacks Rank #2 (Buy), while UPST carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BURLINGAME, Calif.--(BUSINESS WIRE)--Upstart Holdings, Inc. (NASDAQ: UPST), the leading artificial intelligence (AI) lending marketplace, today announced a new multi-year forward-flow agreement with Castlelake, L.P. (“Castlelake”), a global alternative investment firm specializing in asset-based private credit. Under the agreement, Castlelake-managed funds have agreed to purchase up to $4 billion of consumer loans originated on the Upstart platform over up to 24 months through a new forward-flo.

The market expects Upstart Holdings, Inc. (UPST - Free Report) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 4. On the other hand, if they miss, the stock may move lower.

While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.

Zacks Consensus EstimateThis company is expected to post quarterly earnings of $0.58 per share in its upcoming report, which represents a year-over-year change of +61.1%.

Revenues are expected to be $354.89 million, up 37.9% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Upstart?For Upstart, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -13.79%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination makes it difficult to conclusively predict that Upstart will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Upstart would post earnings of $0.39 per share when it actually produced earnings of $0.30, delivering a surprise of -23.08%.

Over the last four quarters, the company has beaten consensus EPS estimates two times.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Upstart doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

An Industry Player's Expected ResultsPiper Sandler Companies (PIPR - Free Report) , another stock in the Zacks Financial - Miscellaneous Services industry, is expected to report earnings per share of $0.85 for the quarter ended June 2026. This estimate points to a year-over-year change of +14.9%. Revenues for the quarter are expected to be $430.53 million, up 6.2% from the year-ago quarter.

Over the last 30 days, the consensus EPS estimate for PIPER SANDLR CP has remained unchanged. Nevertheless, the company now has an Earnings ESP of +4.14%, reflecting a higher Most Accurate Estimate.

When combined with a Zacks Rank of #4 (Sell), this Earnings ESP makes it difficult to conclusively predict that PIPER SANDLR CP will beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Upstart Holdings, Inc. (UPST - Free Report) closed at $26.93 in the latest trading session, marking a -2.39% move from the prior day. This change lagged the S&P 500's daily gain of 0.05%. Meanwhile, the Dow gained 0.46%, and the Nasdaq, a tech-heavy index, lost 0.64%.

Coming into today, shares of the company had lost 16.32% in the past month. In that same time, the Finance sector gained 1.74%, while the S&P 500 gained 0.61%.

The upcoming earnings release of Upstart Holdings, Inc. will be of great interest to investors. The company's earnings report is expected on August 4, 2026. The company is expected to report EPS of $0.58, up 61.11% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $354.89 million, indicating a 37.93% upward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $2.25 per share and revenue of $1.43 billion, which would represent changes of +29.31% and +36.53%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Upstart Holdings, Inc. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Right now, Upstart Holdings, Inc. possesses a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Upstart Holdings, Inc. has a Forward P/E ratio of 12.24 right now. This signifies a premium in comparison to the average Forward P/E of 10.63 for its industry.

We can also see that UPST currently has a PEG ratio of 0.3. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Financial - Miscellaneous Services industry was having an average PEG ratio of 0.97.

The Financial - Miscellaneous Services industry is part of the Finance sector. This group has a Zacks Industry Rank of 182, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

HomeStock IdeasLong IdeasFinancials 

SummaryUpstart Holdings is down over 60% in the past year, yet I view the decline as overdone.Despite trading at a 13x forward P/E, a 10% premium to the sector median, UPST's rapid top- and bottom-line growth justifies a higher valuation.UPST is expected to deliver 44% revenue growth, signaling robust fundamentals even as its earnings multiple has contracted.I assign UPST a Buy rating, citing undervaluation and strong growth prospects despite a 27% short interest. J Studios/DigitalVision via Getty Images

I had Upstart Holdings (UPST) for quite some time on my watchlist, but I was hesitant to initiate coverage. Now, that's about to change. The stock is down by more than 60% over the past year, and I am

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of PGY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Upstart Holdings, Inc. (UPST - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Over the past month, shares of this company have returned -7%, compared to the Zacks S&P 500 composite's +0.3% change. During this period, the Zacks Financial - Miscellaneous Services industry, which Upstart falls in, has lost 3.8%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

Upstart is expected to post earnings of $0.58 per share for the current quarter, representing a year-over-year change of +61.1%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The consensus earnings estimate of $2.25 for the current fiscal year indicates a year-over-year change of +29.3%. This estimate has remained unchanged over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $3.26 indicates a change of +44.9% from what Upstart is expected to report a year ago. Over the past month, the estimate has changed -0.9%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Upstart is rated Zacks Rank #3 (Hold).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

In the case of Upstart, the consensus sales estimate of $354.89 million for the current quarter points to a year-over-year change of +37.9%. The $1.43 billion and $1.86 billion estimates for the current and next fiscal years indicate changes of +36.5% and +30.6%, respectively.

Last Reported Results and Surprise HistoryUpstart reported revenues of $308.21 million in the last reported quarter, representing a year-over-year change of +44.4%. EPS of $0.3 for the same period compares with $0.3 a year ago.

Compared to the Zacks Consensus Estimate of $289.36 million, the reported revenues represent a surprise of +6.51%. The EPS surprise was -23.08%.

Over the last four quarters, Upstart surpassed consensus EPS estimates two times. The company topped consensus revenue estimates three times over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Upstart is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Upstart. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

Upstart Holdings, Inc. (UPST - Free Report) closed the most recent trading day at $30.88, moving -2.25% from the previous trading session. The stock's performance was behind the S&P 500's daily loss of 0.51%. At the same time, the Dow lost 0.2%, and the tech-heavy Nasdaq lost 1.47%.

The company's shares have seen an increase of 3.71% over the last month, surpassing the Finance sector's gain of 3.25% and the S&P 500's gain of 0.53%.

Investors will be eagerly watching for the performance of Upstart Holdings, Inc. in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on August 4, 2026. The company's upcoming EPS is projected at $0.58, signifying a 61.11% increase compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $354.89 million, up 37.93% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $2.25 per share and revenue of $1.43 billion, which would represent changes of +29.31% and +36.53%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Upstart Holdings, Inc. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Upstart Holdings, Inc. is currently a Zacks Rank #3 (Hold).

In terms of valuation, Upstart Holdings, Inc. is currently trading at a Forward P/E ratio of 14.02. This indicates a premium in contrast to its industry's Forward P/E of 11.11.

One should further note that UPST currently holds a PEG ratio of 0.34. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Financial - Miscellaneous Services was holding an average PEG ratio of 0.94 at yesterday's closing price.

The Financial - Miscellaneous Services industry is part of the Finance sector. At present, this industry carries a Zacks Industry Rank of 161, placing it within the bottom 35% of over 250 industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

Upstart Holdings, Inc. (UPST - Free Report) ended the recent trading session at $31.81, demonstrating a -3.78% change from the preceding day's closing price. This change lagged the S&P 500's daily loss of 0.28%. Meanwhile, the Dow experienced a drop of 1.09%, and the technology-dominated Nasdaq saw an increase of 0.2%.

Shares of the company have appreciated by 6.44% over the course of the past month, outperforming the Finance sector's gain of 5.35%, and the S&P 500's gain of 1.64%.

The investment community will be paying close attention to the earnings performance of Upstart Holdings, Inc. in its upcoming release. The company is slated to reveal its earnings on August 4, 2026. The company is predicted to post an EPS of $0.55, indicating a 52.78% growth compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $354.89 million, up 37.93% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.27 per share and a revenue of $1.43 billion, representing changes of +30.46% and +36.53%, respectively, from the prior year.

Any recent changes to analyst estimates for Upstart Holdings, Inc. should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Upstart Holdings, Inc. is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Upstart Holdings, Inc.'s current valuation metrics, including its Forward P/E ratio of 14.59. This indicates a premium in contrast to its industry's Forward P/E of 11.09.

It's also important to note that UPST currently trades at a PEG ratio of 0.35. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Financial - Miscellaneous Services industry stood at 1.01 at the close of the market yesterday.

The Financial - Miscellaneous Services industry is part of the Finance sector. Currently, this industry holds a Zacks Industry Rank of 155, positioning it in the bottom 37% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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