GET DAILY SIGNALSUpstart Holdings (UPST) Posts +34% Revenue Growth in Q3 but Lowers Full-Year Outlook
Key Takeaways
- Upstart Holdings, Inc. (UPST) reported total revenue of $370.52 million for the third quarter of 2026, up roughly 34% year over year and modestly above consensus estimates of approximately $365–366 million.
- Revenue from fees reached a record $364 million, up 41% year over year, while contribution profit hit an all-time high of $218 million with a 60% contribution margin.
- GAAP net income came in at about $37 million (a 10% margin), with diluted earnings per share (EPS) of $0.33, up from $0.23 in the prior-year quarter.
- Total originations grew 44% year over year to $4.1 billion, driven by a 194% surge in secured originations; the secured segment swung to a positive 17% contribution margin.
- Management lowered full-year 2026 total revenue guidance to approximately $1.35 billion and adjusted EBITDA to roughly $260 million, citing rising defaults and higher interest rates.
Why This Quarter Matters
Upstart operates an AI-powered lending marketplace that connects borrowers with banks and credit unions, earning the bulk of its revenue from fees on newly originated loans. This quarterly report matters because it tests whether the company's technology-driven growth can hold up as macroeconomic conditions deteriorate. Heading into the quarter, investors were watching origination volume, contribution margin, and the company's exposure to loans held on its own balance sheet. With inflation reaccelerating and consumer delinquencies climbing, the third-quarter release was expected to reveal how much of Upstart's momentum is durable versus dependent on a favorable credit environment. I also checked this using Tickeron’s AI Screener to compare the stock against peers in the sector.
Breaking Down the Reported Results
Upstart delivered a quarter that split neatly into two stories. Total revenue rose about 34% year over year to $370.52 million, slightly ahead of consensus, while revenue from fees set a record of $364 million, up 41%. Contribution profit — the company's preferred measure of profitable growth from new originations — reached a record $218 million, up 48% year over year, with contribution margin expanding to 60%. GAAP net income was roughly $37 million, with diluted EPS of $0.33 versus $0.23 a year earlier. Adjusted EBITDA climbed 26% to approximately $89 million, a 24% margin.
Beneath those headline figures, however, pressure was visible. Net interest income and fair value adjustments collapsed to about $6 million from roughly $18 million a year ago, reflecting unrealized losses and charge-offs on balance-sheet loans. The company also cut its full-year outlook: total revenue guidance moved to about $1.35 billion (from $1.4 billion) and adjusted EBITDA to about $260 million (from $294 million), even as fee revenue guidance was raised to roughly $1.32 billion. From what I see, these adjustments highlight the impact of tougher credit conditions.
Market Reaction and Investor Sentiment
The market's response underscored the tension between Upstart's operating momentum and its macro sensitivity. Despite revenue that topped estimates and record contribution profit, shares slipped following the report as investors focused on the guidance cut and the deterioration in balance-sheet income. The company's Upstart Macro Index (UMI) — its internal gauge of how economic conditions affect loan defaults — averaged 1.50 in the quarter, up from 1.41 in the second quarter, prompting more conservative underwriting. Management estimated the higher UMI reduced third-quarter originations by at least $370 million. With the stock already down more than 50% year to date entering the release, sentiment remained cautious, and the lowered full-year profit outlook reinforced concerns about near-term earnings quality.
Forward Outlook and Key Factors to Monitor
Looking ahead, investors should track a few distinct signals. First, watch the trajectory of the UMI and two-year Treasury yields, which management identified as the primary macro headwinds. The company's updated guidance assumes UMI does not exceed 1.55 and that interest rates remain near current levels; a further rise in either would likely pressure originations and fair-value marks. I’m watching this closely as it could shape near-term performance.
Second, monitor the secured lending segment. The swing to a positive 17% contribution margin — one quarter ahead of target — suggests the auto and home equity products are scaling toward profitability. Sustained improvement here would diversify Upstart beyond unsecured personal loans and strengthen the unit economics story.
Third, keep an eye on capital efficiency and the planned 2027 launch of Upstart Bank. Management intends to move most balance-sheet loans to deposit funding, which could reduce funding costs and unlock cash. Finally, watch October and fourth-quarter origination volume, which management said ran below September's daily pace, for early evidence of how the tougher macro environment is translating into loan demand.
Using AI Tools for Deeper Analysis
In my view, tools like Tickeron’s AI Screener help cut through the noise when evaluating earnings-driven names such as UPST. The platform lets users apply filters for technical patterns, fundamentals, and AI signals to quickly identify comparable opportunities or confirm trends in sectors like fintech lending. It has become a regular part of how I cross-check company-specific data against broader market moves before forming a view on guidance changes or segment performance.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
UPST's RSI Oscillator recovers from oversold territory
The RSI Indicator for UPST moved out of oversold territory on October 05, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 36 similar instances when the indicator left oversold territory. In 32 of the 36 cases the stock moved higher. This puts the odds of a move higher at 89%.
Technical Analysis (Indicators)
Bullish Trend Analysis
Following a +4.77% 3-day Advance, the price is estimated to grow further. Considering data from situations where UPST advanced for three days, in 235 of 279 cases, the price rose further within the following month. The odds of a continued upward trend are 84%.
UPST may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 55 of 57 cases where UPST's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 90%.
The Momentum Indicator moved below the 0 level on October 30, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on UPST as a result. In 79 of 84 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 90%.
The Moving Average Convergence Divergence Histogram (MACD) for UPST turned negative on November 02, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 43 similar instances when the indicator turned negative. In 40 of the 43 cases the stock turned lower in the days that followed. This puts the odds of success at 90%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where UPST declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 90%.
The Aroon Indicator for UPST entered a downward trend on October 23, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 35 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is 64 (best 1 - 100 worst), indicating fairly steady price growth. UPST’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 75 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.600) is normal, around the industry mean (3.811). UPST has a moderately high P/E Ratio (33.825) as compared to the industry average of (5.984). Projected Growth (PEG Ratio) (0.040) is also within normal values, averaging (3.918). Dividend Yield (0.000) settles around the average of (0.181) among similar stocks. P/S Ratio (2.160) is also within normal values, averaging (5.901).
The Tickeron PE Growth Rating for this company is 96 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. UPST’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 79, placing this stock worse than average.
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