UPST Q3 Earnings Preview: Should You Buy the Stock Now or Wait?

Core Insights - Upstart Holdings (UPST) is expected to report its third-quarter 2025 results on November 4, with management guiding revenues of $280 million and adjusted net income of approximately $44 million [1][6] - The Zacks Consensus Estimate for quarterly revenues is $281.02 million, reflecting a 73.3% increase year-over-year, while the consensus for earnings is 42 cents per share, a significant rise from a loss of 6 cents in the previous year [1][9] Financial Projections - For the full year 2025, management projects revenues of $1.055 billion and GAAP net income of approximately $35 million [2] - The Zacks Consensus Estimate for UPST's full-year revenues is $963.4 million, indicating a 51.36% year-over-year increase, with an EPS consensus of $1.66, up from a loss of 20 cents per share in the prior year [2] Earnings Surprise History - Upstart has a strong earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 192.09% [3] Earnings Prediction Model - The proprietary model does not predict an earnings beat for Upstart this time, as it has an Earnings ESP of 0.00% and a Zacks Rank 3 (Hold) [4][5] Revenue and Profitability Drivers - Management expects Q3 revenues of $280 million, with fee-based income contributing approximately $275 million and net interest income around $5 million [8][11] - The new underwriting model, Model 22, has improved conversion rates and is expected to sustain revenue growth, while tighter cost controls are anticipated to maintain a solid contribution margin [10] Market Performance and Valuation - Upstart's shares have declined 8.6% over the past six months, underperforming peers like LendingClub and SoFi, which have seen significant gains [12] - The stock is currently considered overvalued, with a Price/Sales ratio of 3.70X, above the industry average of 3.28X [13] Competitive Position and Growth Outlook - Upstart is making progress with revenue recovery and profitability, expanding into new lending verticals, and attracting new lending partners [17] - However, exposure to credit-sensitive borrowers and market liquidity challenges may create volatility in growth [18]