Why Upstart Stock Is Down More Than 13% Today

Core Viewpoint - Despite a strong revenue growth of 35% year over year to $265 million and a profit of $18.6 million in the final quarter of fiscal 2025, shares of Upstart are down 13.5% due to an earnings miss and qualitative concerns [1][2]. Financial Performance - Revenue grew 35% year over year to $265 million, driven by an 86% increase in loan originations [2]. - Projected sales for 2026 are approximately $1.4 billion, a significant increase from last year's $1.0 billion [2]. Leadership Changes - The imminent exit of co-founder and CEO Dave Girouard is a concern, as he will be replaced by co-founder and current CTO Paul Gu, marking the first time the original CEO will not lead the company [3]. Guidance Changes - Upstart has decided to stop providing quarterly guidance, opting instead for full-year estimates, which has led to reduced interim clarity for investors [4]. Market Reaction - The market's reaction to the leadership change and guidance modification is seen as a superficial response, as Girouard is closely associated with Upstart [5]. Future Outlook - The company remains committed to an annualized revenue growth rate of 35% through 2028, with analysts expecting growth to accelerate from 24.6% in 2026 to nearly 34% in 2027 [8]. - Upstart will begin publishing loan-origination metrics on a monthly basis, which will restore some transparency lost from the discontinuation of quarterly guidance [8].