Shares of Upstart Holdings Inc.
were up more than 10% in Monday afternoon trading, ahead of the lending company’s second-quarter earnings report, which is expected after the closing bell. Upstart executives disclosed a month back that they expected to fall well short of their prior forecasts for the second quarter, but the after-hours earnings report will contain more information about business trends and expectations. “Management noted that inflation, lower origination volumes and apprehension from credit investors with nonprime unsecured loans caused the weak results,” Jefferies analyst John Hecht wrote in a recent note to clients. “With 2Q results, we will look for updated FY22 guidance and comments on how the company may alter its underwriting or funding strategy in the context of higher than expected net losses and an increasingly challenging outlook for consumer lending.” Wedbush analyst David Chiaverini wrote recently that he expected Upstart could lower its full-year forecast to roughly $1.00 billion from a previous target of $1.25 billion, which he said could reflect “funding constraints as appetite has waned from credit buyers and the ABS [asset-backed securities] market.” Shares of Upstart have fallen 61% over the past three months as the S&P 500
has risen 0.5%.
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