UPST Q3 Earnings Preview: Should You Buy the Stock Now or Wait?

Upstart Holdings UPST is set to report its third-quarter 2025 results on Nov. 4.

For the third quarter, management has guided revenues of $280 million and adjusted net income of approximately $44 million.

The Zacks Consensus Estimate for quarterly revenues is pegged at $281.02 million, indicating an increase of 73.3% from the year-ago quarter’s reported figure. The consensus mark for earnings stands at 42 cents per share, calling for a rise from a loss of 6 cents in the year-ago quarter.

For 2025, management has projected revenues of $1.055 billion and GAAP net income of approximately $35 million.

For 2025, the Zacks Consensus Estimate for UPST’s revenues is pegged at $963.4 million, implying a jump of 51.36% year over year. The consensus mark for full-year EPS stands at $1.66, suggesting a substantial increase from a loss of 20 cents per share in the year-ago period. 

This company, providing an AI lending platform, has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, with the average beat being 192.09%. 

Upstart Holdings, Inc. Price and EPS Surprise

Upstart Holdings, Inc. price-eps-surprise | Upstart Holdings, Inc. Quote

Here Is What Our Quantitative Model Predicts for UPST:

Our proprietary model does not conclusively predict an earnings beat for Upstart this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Upstart has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

UPST: Factors at Play

As Upstart approaches its third-quarter results, investors are watching whether its volume growth can stay aligned with its profitability goals. Management’s guidance for the quarter signals confidence in maintaining both scale and efficiency. With origination demand rebounding and new funding channels improving, Upstart is expected to have expanded its lending activity.

For the third quarter of 2025, management has guided for revenues of roughly $280 million, with continued strength in fee-based income, and expects contribution margins to hold around 58%. That projection implies steady demand from lending partners and rising borrower engagement, supported by an improving funding backdrop. The quarter will also show whether new verticals, particularly Auto and Home, can keep fueling top-line growth. Specifically, management expects revenues from fees of approximately $275 million and net interest income of around $5 million. 

The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $281.02 million, up 73.3% year over year, with transaction originations of $3.2 billion. The consensus mark for revenues from fees is currently pegged at $275.62 million, while that for net interest income stands at $5.46 million.

Upstart’s latest underwriting model, Model 22, is likely to have continued to play a major role in sustaining this upbeat momentum. It lifted conversion rates from 19.1% in the first quarter to 23.9% in the second quarter, boosting both approval and origination volumes. The resulting scale is likely to have continued to help increase revenues, while tighter cost controls are expected to have helped sustain a solid contribution margin in the third quarter.

Management expects adjusted EBITDA of approximately $56 million, GAAP net income of about $9 million and adjusted net income of around $44 million.

UPST’s Price Performance & Valuation

Shares of Upstart have declined 8.6% in the past six months, underperforming both the broader industry and the S&P 500 composite. Its peers like LendingClub Corporation LC and SoFi Technologies, Inc. SOFI have climbed 68.8% and 130.8%, respectively, over the same time frame. 

From a valuation perspective, we note that Upstart shares are currently overvalued, as suggested by the Value Score of F.

In terms of forward 12-month Price/Sales (P/S), Upstart is currently trading at 3.70X, which is at a premium to the industry average of 3.28X. Compared with its peers, the stock trades at a discount to SoFi Technologies and at a premium to LendingClub. At present, SOFI has a P/S multiple of 8.28, while LC has a P/S multiple of 1.83. 

UPST: Buy, Sell or Hold?

Upstart Holdings has shown meaningful progress, with revenue rebound, renewed profitability and expansion into additional lending verticals, highlighting a stronger competitive position. Its AI-based credit platform continues to draw new lending partners, reinforcing its scalable, data-driven model. 

However, exposure to credit-sensitive borrowers and dependence on market liquidity make its growth path volatile. Recent weakness in credit trends and challenges in used car loans have weighed on performance. 

Although the stock’s correction may appeal to long-term investors, the uncertain credit backdrop warrants patience. At this stage, Upstart appears more appropriate as a “hold” — a name to monitor rather than trade aggressively.

UPST Holdings has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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