Upstart stock surges after 'beast-mode" Q4, robust outlook for auto lending

Feb. 16, 2022 9:20 AM ETUpstart Holdings, Inc. (UPST)By: Liz Kiesche, SA News Editor7 Comments

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Upstart (NASDAQ:UPST) stock jumps 21% in premarket trading following Q4 earnings beat, strong guidance, and launching a $400M stock buyback.

"'Beast-mode' quarter defied normalization worries," Citi analyst Peter Christiansen said in a note to clients. Q4 revenue and adjusted EBITDA topped expectations, but "more impressive was the confident 'initial' outlook for ~65% revenue growth (24% above our estimate), including initial assumptions for $1.5B in auto loan volume (~8% of total)," he wrote.

Barclays called Upstart's (UPST) an "impressive beat," fueled by core transaction fees, and noted FY22 revenue guidance "nicely ahead of the Street."

Piper Sandler analyst Arvind Ramnani said: "FY22 outlook came in higher than our optimistic outlook, primarily through continued traction from Upstart's (UPST) core personal lending offering and its emerging automotive offering."

Bears are likely to focus on the company's "pressured FY22 margin outlook," which Ramnani attributes to the ramp up in auto and expansion of its tech team, both needed investments for its product expansions. (Added at 10:13 AM ET).

Upstart (UPST) CEO Dave Girouard spoke about scaling up its auto lending on the company's earnings call on Tuesday. The company's proprietary auto refinance product has "far less competition than we've had in personal lending," he said, adding "Today, we're confident that automotive lending is a category we can grow into for years to come."

The company expects to introduce small dollar lending and small business lending products in 2022 and mortgage in 2023, Girouard said.

Also read, on Tuesday, Upstart (UPST) announced $400M share repurchase program.

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