Upstart (UPST -3.39%) stock is sinking in this week’s trading. The company’s share price was down 21.9% from last week’s market close as of 2:30 p.m. ET this Friday, according to data from S&P Global Market Intelligence.
Upstart published fourth-quarter results after the market closed on Feb. 13. While the company’s loss came in lower than expected, sales fell short of the market’s target. Additionally, Wall Street doesn’t seem to be pleased with the company’s forward guidance.
Upstart’s mixed earnings report has investors feeling down
Upstart posted a non-GAAP (generally accepted accounting principles) adjusted loss of $0.11 per share on sales of $140.31 million in the fourth quarter. Meanwhile, the average analyst estimate had called for the business to post an adjusted loss of $0.14 per share on sales of $145.32 million.
The fintech specialist’s sales dipped 4.5% year over year in Q4. Meanwhile, the business originated 129,664 loans in the period. The now loan amounts across the company’s platform totaled $1.3 billion, representing a 19% decrease from origination value in last year’s quarter.
On the heels of this week’s sell-offs, Upstart stock is now down roughly 35% in 2024.
What comes next for Upstart?
Upstart’s fourth-quarter results weren’t terrible, but guidance suggest that the business won’t see meaningful performance improvements in the near term.
For this year’s first quarter, Upstart expects sales to come in at roughly $125 million, representing an increase of roughly 21% year over year. On the other hand, sales for the period are still projected to decline roughly 14% on a sequential quarterly basis.
Meanwhile, the company expects to post an adjusted loss of $33 million in the period. The business posted an adjusted loss of $38.3 million in the prior-year period, but it’s hard to get excited about the moderate improvement, given management’s sales projection.
For comparison, Upstart sales of $310 million and adjusted net income of $58.6 million in Q2 2022. Investors were hoping to see stronger recovery this year, but it looks like that may not be in the cards. Management’s guidance is raising concerns on Wall Street that the company’s business may continue to struggle unless macroeconomic conditions are optimal.
Keith Noonan 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.
