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Upstart Stock Plunges 34% After Lower-Than-Expected Guidance

Aug 10, 2023 - pymnts.com
Upstart, an AI lending platform, saw its stock drop by 34% on Wednesday following a Q3 outlook that was lower than expected. This comes after a significant rally in the stock, which at one point reached a 445% increase, spurred by better-than-expected Q1 results and a promising Q2 outlook. The rally was also boosted by investor interest in AI companies and a partnership with Arbor Financial Credit Union.

Despite the recent drop, Upstart CEO Dave Girouard remains confident in the company's future, citing its continued investment in AI and a record percentage of automated unsecured loans in Q2. However, Wall Street analysts have recommended sell-equivalent on Upstart, with Morgan Stanley analyst James Faucette describing the rally as "low-quality".

Key takeaways:

  • Upstart's stock fell by 34% on Wednesday, following a lower than expected outlook for the third quarter.
  • The company's stock had previously surged by 445% after it reported higher than expected first-quarter results and a positive second-quarter outlook.
  • A majority of Wall Street analysts have recommended selling Upstart's stock, according to Bloomberg data.
  • Despite the disappointing third quarter outlook, CEO Dave Girouard remains confident in the company's future, citing its continued investment in AI and a record percentage of automated unsecured loans in the second quarter.
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