Upstart Holdings, Inc. (NASDAQ:UPST) Analysts Just Trimmed Their Revenue Forecasts By 33%

The latest analyst coverage could presage a bad day for Upstart Holdings, Inc. (NASDAQ:UPST), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, the current consensus, from the twelve analysts covering Upstart Holdings, is for revenues of US$507m in 2023, which would reflect a concerning 50% reduction in Upstart Holdings' sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$753m in 2023. It looks like forecasts have become a fair bit less optimistic on Upstart Holdings, given the sizeable cut to revenue estimates.

View our latest analysis for Upstart Holdings

There was no particular change to the consensus price target of US$14.05, with Upstart Holdings' latest outlook seemingly not enough to result in a change of valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Upstart Holdings, with the most bullish analyst valuing it at US$24.00 and the most bearish at US$8.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 50% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 44% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.8% annually for the foreseeable future. It's pretty clear that Upstart Holdings' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Upstart Holdings this year. They're also anticipating slower revenue growth than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Upstart Holdings going forwards.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Upstart Holdings' financials, such as its declining profit margins. Learn more, and discover the 2 other flags we've identified, for free on our platform here.

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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.