Upstart Holdings Stock News and Forecast: UPST loses more than half its value on dismal earnings report

• UPST stock collapses over 50% despite beating earnings estimates.
• Upstart Holdings gave a downbeat outlook which set the losses in motion.
• UPST shares traded as high as $400 only one year ago, now below $40.

Update: Upstart Holdings share price has collapsed on after-hours and pre-market trading after the credit-lending company released dismal earnings figures after the Monday close. Upstart is one of the worst-performing stocks in the current bear market, which has affected mainly the so-called high-growth, high-risk companies that enjoyed huge gains the past two years on the bubbly stock market performance. UPST stock is down an astounding 54% on the day, trading below $35 at the time of this update, about an hour into the main New York trading session on Tuesday. The current price levels are all-time lows since UPST stock went public back in December 2020. The stock reached an all-time high last October at $390 per share and since then has lost more than 90% of its value. Numbers speak for themselves.

UPST stock price collapse, 15-minute chart

Wow, pandemic-darling stocks really are going Back to the Future as all of them appear to be giving up pandemic-fuelled gains. In the process, these types of moves are making the Fed pumping money look worse and worse by the day. Now, we are left with raging inflation and the distinct possibility of a complete financial meltdown and deep recession.

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The pandemic was a once in a 100-year event but before it, economies had been prospering. Global growth was positive. The Fed and other central banks overstepped the mark. Some form of stimulus may have been necessary but the extent and breadth of what we got have created massive financial bubbles which are going off all over the place.

Peloton and Netflix probably sounded the alarm bells but it has been one stock after another, and the majority of pandemic top-performers are down 80% or more. Cathy Wood does come in for probably more than her fair share of criticism now, but when you put yourself out there as the star of the show you have to be prepared for the ups and downs. Wood's ARKK ETF fund includes many names which were favored during the pandemic. ARKK is down 65% from 6 months ago. It fell nearly 10% on Monday. 

UPST stock news: Dismal earnings crater Upstart Holdings

Upstart Holdings is a credit-lender. It aggregates consumer loans to get better deals from banks. Credit is now a dirty word with the economy tightening. Despite this, Upstart beat earnings estimates when it announced on Monday. Revenue was $310 million, ahead of the $300 million estimates. Earnings per share (EPS) was $0.61 ahead of the $0.53 estimate.

However, UPST stock cratered as it guided below expectations. Upstart guided revenue for Q2 of $300 million versus estimates of $335 million. For the full year, 2022, Upstart guided revenue of $1.25 billion versus a consensus of $1.4 billion. The big hit though was earnings before interest tax, depreciation, and amortization (EBITDA). UPST guided EBITDA at $33 million for Q2 versus a consensus of $59 million. 

UPST stock cratered on the release and is currently trading at $43 for a loss of 44% from Monday's close of $77.13. UPST traded as high as $401.49 in October 2021.

UPST stock forecast: Everything points down

When you look at UPST stock since inception it is not hard to wonder just what exactly caused the move from $25 to $400 in the space of 11 months. Oh, wait it was the Fed artificially printing money which inflated every growth stock as money chased the next big thing. While this move is incredibly harsh, it is needed in the long run to allow the correct type of companies to attract capital. Capital is meant to be scarce and allocated to the most valued resource, not to the next meme stocks or hype.

So this period, like all bear markets, should leave the stock market in a healthier place, but it may have damaged the economy terminally along the way.

UPST stock has more legs to the downside with $43 the next support, which we have more or less reached in Tuesday's premarket. More losses are likely, any rallies should be sold unless UPST breaks above $80, so highly unlikely. RSI is not oversold despite a 40% fall and neither is the MFI. All moving averages point lower and UPST stock is trading below all the major ones, 200-day, 50-day, 9, and 21-day for the short-term traders. MACD also finally giving a bearish crossover. Expect some position closing and a 10% rally late this week or early next but that should then be sold.

 

UPST stock 20-hour chart

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