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Is a Beat Likely for Upstart Holdings (UPST) in Q3 Earnings?

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Upstart Holdings (UPST - Free Report) is likely to beat expectations when it reports third-quarter 2023 results after market close on Nov 7.

For the third quarter, the company expects revenues of approximately $140 million. The Zacks Consensus Estimate is currently pegged at $139.7 million, suggesting a decline of 11.2% year over year.

The consensus mark is pegged at a loss of 2 cents per share, suggesting a significant improvement from the year-ago quarter’s loss of 24 cents.

UPST’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 11.9%.

Let’s see how things have shaped up for the upcoming announcement.

Upstart Holdings, Inc. Price and EPS Surprise Upstart Holdings, Inc. Price and EPS Surprise

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

Factors to Consider

Degradation in the macro environment, conservative assumption for Upstart Macro Index in loan pricing, seasonal headwinds and tightening from funding partners are expected to have hurt the top line in the quarter under discussion. The Zacks Consensus Estimate for third-quarter revenues from fees is pegged at $150 million, indicating a 28.6% decline from the year-ago quarter.

Consumer delinquencies are elevated, and funding markets remain limited in their appetite for risk. This is expected to have increased loan pricing in the company’s platform and lowered approval rates for loan applicants, thus reducing transaction volume and affecting the top line.

However, Upstart’s third-quarter results are likely to gain from its strategy to operate as a multiproduct company. Recent launches across its product portfolio powered by generative AI and machine learning may have favored UPST’s performance in the to-be-reported quarter.

Moreover, the company is expected to have gained from a growing partner base in the third quarter. It is engaged with multiple prospective partners who are actively exploring long-term capital relationships.

Earnings Whispers

Our proven model predicts an earnings beat for Upstart this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +9.09%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: UPST sports a Zacks Rank #1.

Other Stocks With the Favorable Combination

Per our model, Synopsys (SNPS - Free Report) , Dell Technologies (DELL - Free Report) and Snowflake (SNOW - Free Report) also have the right combination of elements to post an earnings beat in their upcoming releases.

Synopsys sports a Zacks Rank #1 and has an Earnings ESP of +0.94%. The company is scheduled to report fourth-quarter fiscal 2023 results on Nov 29. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 4.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Synopsys’ fourth-quarter earnings is pegged at $3.04 per share, indicating a year-over-year increase of 59.2%. The consensus mark for revenues stands at $1.58 billion, suggesting a year-over-year surge of 23.3%.

Dell sports a Zacks Rank #1 and has an Earnings ESP of +1.14%. The company is scheduled to report third-quarter fiscal 2024 results on Nov 30. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 39.5%.

The Zacks Consensus Estimate for Dell’s third-quarter earnings stands at $1.47 per share, indicating a year-over-year decline of 36.1%. It is estimated to report revenues of $22.93 billion, which suggests a decrease of approximately 7.2% from the year-ago quarter.

Snowflake is slated to report third-quarter fiscal 2024 results on Nov 29. The company has a Zacks Rank #2 and an Earnings ESP of +15.71% at present. Snowflake’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 244.5%.

The Zacks Consensus Estimate for third-quarter earnings is pegged at 15 cents per share, suggesting an increase of 36.4% from the year-ago quarter’s earnings of 11 cents. Snowflake’s quarterly revenues are estimated to grow 27.6% year over year to $710.5 million.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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