Upstart (NASDAQ:UPST) Shares Gap Down on Disappointing Earnings

Key Points

• Big EPS miss but revenue beat: Upstart reported Q1 EPS of ($0.07) vs. consensus $0.39 (a $0.46 miss) while revenue of $308.2M beat estimates and rose ~44% YoY, prompting the stock to gap down from $31.17 to $28.00 and trade around $28.49 on heavy volume.
• $100 million buyback authorized: The board approved a $100.0M repurchase program (about 3.2% of shares), even as CFO Sanjay Datta sold 7,982 shares, modestly reducing insider ownership.
• Legal and analyst pressure despite mixed ratings: Multiple class‑action filings and recent target cuts (alongside varied analyst views) have created an overhang; the consensus rating is "Hold" with an average price target of $47.53.

Upstart Holdings, Inc. (NASDAQ:UPST - Get Free Report)'s share price gapped down prior to trading on Wednesday following a dissappointing earnings announcement. The stock had previously closed at $31.17, but opened at $28.00. Upstart shares last traded at $28.4920, with a volume of 2,286,183 shares traded.

The company reported ($0.07) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.39 by ($0.46). The firm had revenue of $308.21 million during the quarter, compared to the consensus estimate of $301.30 million. Upstart had a return on equity of 6.30% and a net margin of 5.13%.Upstart's revenue for the quarter was up 44.3% compared to the same quarter last year. During the same quarter last year, the company posted $0.30 EPS.

Upstart declared that its board has initiated a share repurchase program on Thursday, February 19th that permits the company to repurchase $100.00 million in shares. This repurchase authorization permits the company to reacquire up to 3.2% of its stock through open market purchases. Stock repurchase programs are typically an indication that the company's management believes its shares are undervalued.

Key Headlines Impacting Upstart

Here are the key news stories impacting Upstart this week:

• Positive Sentiment: Revenue beat and strong growth — Upstart reported Q1 revenue of $308.2M, up ~44% year‑over‑year, showing demand growth on its lending platform. Upstart Announces First-Quarter 2026 Results
• Positive Sentiment: Analyst support: BTIG reaffirmed a "buy" and set a $43 target, signaling continued conviction in long‑term upside. Benzinga - BTIG Research
• Positive Sentiment: Partnerships expanding distribution — Upstart announced a partnership with Justice Federal Credit Union to widen access to its lending platform. Upstart Holdings (UPST) Partners with Justice Federal Credit Union
• Neutral Sentiment: Price target movement is mixed: Needham trimmed its target from $40 to $37 but kept a "buy" rating (moderating upside), while other firms have varied views. Benzinga - Needham
• Neutral Sentiment: Full earnings call and transcript are available for deeper read on guidance and unit economics — useful for judging sustainability of recent revenue growth. Q1 2026 Earnings Call Transcript Moby Earnings Call Summary
• Negative Sentiment: EPS miss / widening loss — Upstart missed consensus on EPS (reported a loss for the quarter), which triggered immediate downward trading and margin concerns despite revenue beat. UPST Q1 Earnings Miss
• Negative Sentiment: Multiple class‑action filings and investor alerts — Several law firms have filed or solicited plaintiffs in securities class actions related to prior disclosures, which can create legal overhang and investor uncertainty. Pomerantz Class Action Rosen Law Firm Notice
• Negative Sentiment: Major bank target cuts cited by litigation alerts — Reports note that Morgan Stanley and Goldman Sachs trimmed targets recently, which, along with the EPS miss, pressures sentiment and valuations. Levi & Korsinsky Investor Alert

Analyst Upgrades and Downgrades

UPST has been the subject of a number of research reports. Truist Financial decreased their price objective on Upstart from $59.00 to $49.00 and set a "buy" rating for the company in a report on Wednesday, February 11th. Mizuho decreased their price objective on Upstart from $66.00 to $51.00 and set an "outperform" rating for the company in a report on Thursday, March 26th. BTIG Research restated a "buy" rating and set a $43.00 price target on shares of Upstart in a report on Wednesday. Citizens Jmp restated a "market underperform" rating and set a $20.00 price target on shares of Upstart in a report on Friday, February 13th. Finally, B. Riley Financial reduced their price target on Upstart from $66.00 to $54.00 and set a "buy" rating for the company in a report on Wednesday. Seven analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and three have assigned a Sell rating to the company's stock. According to data from MarketBeat.com, Upstart currently has a consensus rating of "Hold" and an average price target of $47.53.

Insider Activity at Upstart

In related news, CFO Sanjay Datta sold 7,982 shares of the stock in a transaction on Friday, February 20th. The stock was sold at an average price of $29.86, for a total transaction of $238,342.52. Following the sale, the chief financial officer directly owned 276,688 shares of the company's stock, valued at $8,261,903.68. This trade represents a 2.80% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. Insiders sold 9,481 shares of company stock worth $282,201 over the last 90 days. Company insiders own 16.67% of the company's stock.

Institutional Investors Weigh In On Upstart

Institutional investors have recently modified their holdings of the business. Clearstead Advisors LLC purchased a new stake in shares of Upstart during the third quarter valued at $25,000. Quarry LP boosted its position in shares of Upstart by 749.2% during the third quarter. Quarry LP now owns 501 shares of the company's stock valued at $25,000 after buying an additional 442 shares during the last quarter. Bayforest Capital Ltd purchased a new stake in shares of Upstart during the fourth quarter valued at $25,000. Northwestern Mutual Wealth Management Co. boosted its position in shares of Upstart by 132.2% during the third quarter. Northwestern Mutual Wealth Management Co. now owns 771 shares of the company's stock valued at $39,000 after buying an additional 439 shares during the last quarter. Finally, Empowered Funds LLC purchased a new stake in shares of Upstart during the fourth quarter valued at $40,000. 63.01% of the stock is owned by hedge funds and other institutional investors.

Upstart Price Performance

The firm has a market capitalization of $2.75 billion, a PE ratio of 68.08, a PEG ratio of 0.90 and a beta of 2.26. The firm has a 50-day simple moving average of $28.62 and a 200-day simple moving average of $38.30.

About Upstart

Upstart Holdings, Inc operates a cloud-based lending marketplace that leverages artificial intelligence and machine learning to assess borrower creditworthiness. The company partners with banks and credit unions, providing its proprietary AI models and underwriting platform to facilitate consumer credit products. By focusing on non‐traditional data points—such as education, employment history and other real‐time indicators—Upstart seeks to improve approval rates and lower loss rates compared with conventional credit scoring methods.

Upstart's core offering centers on unsecured personal loans, which borrowers can use for purposes such as debt consolidation, home improvements or major purchases.

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