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Natalia Mirgorodskaya informed the company on November 3 that she plans to resign as Chief Accounting Officer at the end of the month. The company stated her departure is not due to any disagreements over operations or policies.
Chief Financial Officer Andrea Blankmeyer will take over the accounting duties on an interim basis while the company searches for a permanent replacement. While a change in the accounting leadership can sometimes signal internal friction, this appears to be an orderly transition with the CFO stepping in to maintain stability.
Source: 8-K filing
After Upstart reported its November results, we updated our fair value. We moved our rating to Watch and raised our quality score to 4.0. We increased our rating for sales growth and how well the company is protected from competitors, but lowered our score for how much profit it makes on its investments. We cut our revenue projection for the year to $1.35 billion and added the launch of Upstart Bank and its new capital requirements to what we track.
The company saw a strong recovery in its lending marketplace, with revenue reaching $371 million. This growth was fueled by a 44 percent increase in the total value of loans processed, which hit $4.1 billion for the quarter. Management noted that its newer secured lending products, like car loans and home equity lines of credit, became profitable a full quarter earlier than they had planned.
While the company warned that the broader economy is still putting pressure on its near-term outlook, the results suggest its AI models are successfully finding borrowers that traditional banks might miss. For a long-term owner, the most important takeaway is that Upstart is processing more loans while using less of its own cash to fund them, which makes the business more stable and less reliant on outside investors.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Upstart will share its latest results in about a week. Analysts are looking for earnings of roughly 21 cents per share. The main thing to watch is how many loans the company's AI is processing and whether its bank partners are keeping their appetite for those loans as interest rates shift. This report will also show if Upstart is making progress in car loans and home equity lines of credit. These newer areas are key to the company growing beyond its original focus on personal loans.
MIT Federal Credit Union is deepening its tie to Upstart by using its AI models to power car loans. This expansion moves into indirect lending, where the credit union can offer loans to buyers right at the car dealership rather than just through its own website.
This is a helpful step for Upstart because it needs to prove its technology works for more than just personal loans. By moving deeper into the car market, the company can grow its loan volume without relying entirely on people looking for small personal credit lines.
Source: Business Wire
Management has a history of setting conservative targets and then clearing them, though recent choppy results show the business is sensitive to shifting interest rates.
| Expectation | |
|---|---|
| EPS | $-0.02 |
| Revenue | $311M |