Upstart Holdings Inc (NASDAQ: UPST) opened more than 20% down on Friday after the consumer lending company warned its Q2 results will come in significantly below its previous guidance.
Upstart had already lowered its outlook in May
The stock was ravaged since the Nasdaq-listed firm had already lowered its outlook for the current quarter in May. So, it was broadly disappointing for the investors to learn that even the cut down guidance will prove a bit too hawkish. Explaining why, CEO Dave Girouard said:
Our marketplace is funding-constrained [on] concerns about the macroeconomy. Second, in Q2, we converted loans into cash, which, given the quickly increasing rates, negatively impacted our revenue.
Upstart now forecasts $228 million in revenue on up to $31 million in loss. This compares to experts’ already reduced estimates of $298 million (revenue) and less than $1.0 million (profit).
Upstart stock is now trading near its IPO price
In May, the California-based company had guided $295 million to $305 million in revenue this quarter on $4.0 million in loss (max). Reacting to the news, Piper Sandler’s Arvind Ramnani said:
Upstart will remain in penalty box for multiple quarters. Investor interest on UPST has diminished over the past several months. With these results, that trend will continue until it can get back to a cadence of stable expectations vs results.
Upstart is scheduled to report on August 8th. The stock is now trading close to its IPO price of $20 – significantly below $400 a share that it traded at in mid-October 2021.
The post Upstart stock opens 20% down on Friday: what happened? appeared first on Invezz.
