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Shares of Upstart Holdings Inc. were sinking in after-hours trading Tuesday after the lending company fell short of Wall Street’s expectations with its revenue and earnings forecasts for the current quarter.
The company, which uses artificial intelligence to inform lending decisions, reported a second-quarter net loss of $28.2 million, or 34 cents a share, compared with a loss of $29.9 million, or 36 cents a share, in the year-earlier period. On an adjusted basis, Upstart
UPST,
earned 6 cents a share, whereas analysts tracked by FactSet were modeling a 7-cent loss per share.
Revenue fell to $136 million from $228.2 million. The FactSet consensus was for $135.2 million. The company generated $144 million in fee revenue, compared with the $131 million that analysts were expecting.
Upstart’s lending partners originated 109,447 loans across its platform in the second quarter, totaling $1.2 billion. Conversion on rate requests was 9%, down from 13% in the same period a year prior.
Shares of Upstart were down more than 18% in Tuesday’s extended session.
For the third quarter, Upstart expects $140 million in revenue, while analysts had been anticipating $155.3 million. The company also models $5 million in adjusted earnings before interest, taxes, depreciation and amortization (Ebitda), while analysts were looking for $9.6 million in adjusted Ebitda.
“While the economic environment continues to be challenging, Upstart has the opportunity to grow quickly and profitably when we return to a normalized economy,” Chief Executive Dave Girouard said in a release.
Shares of Upstart have rocketed 291% so far in 2023, through Tuesday’s close, as the S&P 500
SPX
has risen 17%.
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