Upstart Holdings, Inc. (NASDAQ:UPST) Analysts Just Cut Their EPS Forecasts Substantially

Today is shaping up negative for Upstart Holdings, Inc. (NASDAQ:UPST) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the current consensus from Upstart Holdings' 16 analysts is for revenues of US$579m in 2024 which - if met - would reflect an okay 6.2% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 52% to US$1.42 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$653m and losses of US$1.27 per share in 2024. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for Upstart Holdings

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Upstart Holdings' revenue growth is expected to slow, with the forecast 6.2% annualised growth rate until the end of 2024 being well below the historical 28% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Upstart Holdings.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Upstart Holdings, and we wouldn't blame shareholders for feeling a little more cautious themselves.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Upstart Holdings analysts - going out to 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.