UPST · Upstart Holdings
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $24.10
Updated ·
Price against the kill line
18.8% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $24.10, set on 12 November 2026. The shares are down 34.3% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $24.10, which would put the shares over the 50-day moving average and above every close since the 3 November 2026 report. Alternatively, November daily originations above the third quarter's $51.6 million daily pace.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Financials
Quarter to 30 September 2026, filed 3 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 371
- Revenue, change on a year (%)
- +33.7
- Operating margin (%)
- 9.7
- Free cash flow, four quarters ($M)
- −187
- Net cash, cash less debt ($M)
- −1,566
- Price to earnings (×)
- 29.7
- Enterprise value to sales (×)
- 2.6
- Enterprise value to operating income (×)
- 56.4
All filed numbers
What Upstart Holdings reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| filed | 371 | +33.7 | 9.7 |
| filed | 365 | +41.7 | 4.0 |
| filed | 308 | +44.4 | −2.4 |
| filed | 296 | +35.2 | 6.4 |
| filed | 277 | +70.9 | 8.5 |
| filed | 257 | +101.6 | 1.8 |
| Pre-tax income ($M) | Not reported |
| Net income ($M) four quarters: 65.1 | 36.6 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +14.3 |
| Operating cash flow ($M) | −181 |
| Capital spending ($M) | 5.8 |
| Free cash flow ($M) | −187 |
| Cash and short-term investments ($M) | 462 |
| Debt ($M) | 2,027 |
| Net cash, cash less debt ($M) | −1,566 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | Not reported |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 887 |
| Market value ($M) | 1,935 |
| Enterprise value, market value plus net debt ($M) | 3,501 |
| Enterprise value to sales (×) | 2.6 |
| Enterprise value to operating income (×) | 56.4 |
| Price to earnings (×) | 29.7 |
| Price to book value (×) | 2.2 |
| Free-cash-flow yield (%) | −9.7 |
Short interest (FINRA, settled 15 October 2026, published 13 November 2026): 27.2% of shares outstanding sold short, 6.4 days of average trading to cover, −5.9% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $1.3M | $4.4M |
| 12 monthsfrom | $7.7M | $7.4M |
The thesis
Upstart Holdings is more likely to lag the S&P 500 over the next three months. On 3 November 2026 it reported record third-quarter volume, but on the same day it lowered its 2026 outlook and showed lending slowing in October. The November originations release and the fourth-quarter report will show whether the slowdown deepens or reverses.
The rating is Low because the business still depends on interest rates and on Upstart's own credit-stress gauge, and both moved the wrong way in the third quarter. The company estimated that a rising Upstart Macro Index (UMI) and higher rates took about $370 million out of third-quarter originations (Q3 call, 3 November 2026). October originations ran at $48.1 million per business day. That is 9% below September's daily pace (company release, 3 November 2026).
The price already reflects a smaller 2026. At the 11 November 2026 close of $20.56, the shares trade below the $24 targets that Goldman Sachs, Morgan Stanley and Stephens set on 4 November 2026. In this view, the price allows for the reduced outlook but not for a second quarter of falling daily volume.
Bullish and bearish views on Upstart Holdings, Inc.
The bull case on Upstart Holdings, Inc. (UPST), in brief: third-quarter fee revenue set a record. The bear case: the 2026 outlook was cut.
Bull case
- Third-quarter fee revenue set a record. Fee revenue was $364.0 million, up 41% from a year earlier. Total revenue was $370.5 million, up 34% (Q3 2026 earnings release, 3 November 2026).
- Lending volume and contribution profit grew. Originations were $4.12 billion on 574,089 loans, up 44% in dollars. Contribution margin was 60%, against 57% a year earlier (earnings release, 3 November 2026).
- Secured lending turned profitable. Secured loans earned a 17% contribution margin in the third quarter, against negative 35% in the second, and secured fee revenue was $34 million (Q3 call, 3 November 2026).
- The chief executive bought shares. Chief Executive Paul Gu bought 50,000 shares on the open market at $25.55 on 10 September 2026 (SEC Form 4). That price is above the 11 November 2026 close.
- Buy-rated analysts see room above the price. After the report, Citi kept a Buy rating with a $46 target, B. Riley Buy with $42 and BTIG Buy with $40 (3 November to 4 November 2026). Needham and Truist cut their targets to $30.
Bear case
- The 2026 outlook was cut. Upstart now guides to about $1.32 billion of fee revenue, down from $1.40 billion (Benzinga, 3 November 2026). It also guides to about $1.35 billion of total revenue and about $260 million of adjusted EBITDA, which is earnings before interest, taxes, depreciation and amortization (earnings release, 3 November 2026).
- October volume slowed. October originations were $1.249 billion, or $48.1 million per business day. The daily pace was 9% below September's (company release and Q3 call, 3 November 2026).
- Fewer applicants were approved. The conversion rate fell to 18.6% in the third quarter from 19.4% a year earlier (earnings release, 3 November 2026).
- The guidance assumes credit stress stops rising. The UMI averaged 1.5% in the third quarter, up from 1.41% in the second, and its latest reading was 1.53. The $260 million EBITDA guide assumes the index stays at or below 1.55 through year-end (Q3 call, 3 November 2026).
- Loan-value write-downs are hurting income. Net interest income and fair-value adjustments came to about $6 million in the third quarter, down 65% from a year earlier. Management said most of the expected fourth-quarter fair-value hit will come from write-downs of beneficial-interest assets (Q3 call, 3 November 2026).
- Insiders sold and an officer is leaving. President Sanjay Datta sold 116,000 shares at $27.29 on 8 September 2026 after exercising options (SEC Form 4). Chief Accounting Officer Natalia Mirgorodskaya resigns effective 30 November 2026 (8-K, 9 November 2026).
Price setup
The shares closed at $20.56 on 11 November 2026. That is just above the 52-week closing low of $20.41, set on 10 November 2026. The last close is 60.5% below the 52-week intraday high of $52.10, reached on 6 January 2026. Over three months the shares are down 33.6% from the $30.97 close of 13 August 2026.
On 4 November 2026, the session after the report, the shares closed at $23.38. They have not closed that high since, and by 10 November 2026 they had fallen another 12.7%. The price sits below both the 50-day moving average of $24.06 and the 200-day moving average of $28.90 (adjusted daily closes, as of 11 November 2026).
Two levels frame the case. The 50-day average sits close to the $24 targets set by Goldman Sachs, Morgan Stanley and Stephens. The $25.55 price Paul Gu paid on 10 September 2026 sits above it.
Catalysts ahead
- 30 November 2026: Chief Accounting Officer resignation takes effect; CFO becomes interim principal accounting officer. This tests whether the accounting function stays steady through the year-end close and the 2026 annual report without a permanent chief accounting officer.
- ~3 December 2026 (est.): November 2026 originations and UMI update. This shows whether daily lending volume keeps falling from October's $48.1M or recovers toward the third quarter's pace, and whether the UMI stays at or below the 1.55 the guidance assumes.
- 9 December 2026: Federal Reserve interest-rate decision. Rates drive Upstart's funding costs, loan approvals and fair-value write-downs; management blamed higher rates for part of the third-quarter originations shortfall.
- ~10 February 2027 (est.): Q4 2026 results and 2027 outlook. This shows whether the cut 2026 guidance holds and whether the 2027 outlook returns to growth, including progress on opening Upstart Bank in early 2027.
What would change the view
A daily close above $24.10, which would put the shares over the 50-day moving average and above every close since the 3 November 2026 report. Alternatively, November daily originations above the third quarter's $51.6 million daily pace.
What it trades with
Upstart's volume depends on interest rates and on consumer-credit conditions. Management attributed the estimated $370 million third-quarter originations shortfall to a rising UMI and higher rates (Q3 call, 3 November 2026). The shares therefore tend to move with rate expectations and consumer-credit news, more than with the broader technology sector. The Federal Reserve's 9 December 2026 decision is the next shared driver.
More than 95% of Upstart's loans are funded by third parties, mainly through multi-year forward-flow agreements, such as the up-to-$4 billion commitment from Castlelake announced in July 2026. That model links Upstart to private-credit buyers' appetite for consumer loans. Upstart Bank, which management says is on track to open in early 2027 (Q3 call, 3 November 2026), would reduce that dependence. It falls outside the three-month window.
Notes
- Upstart publishes monthly originations and its Upstart Macro Index reading between quarterly reports, so volume trends are visible before each earnings release.
- Chief Accounting Officer Natalia Mirgorodskaya resigns effective 30 November 2026; CFO Andrea Blankmeyer serves as interim principal accounting officer until a permanent replacement is found.
The evidence, claim by claim (8)
- Q3 2026 total revenue was $370.5M (+34% YoY) and fee revenue $364.0M (+41%); GAAP net income was $36.6M, diluted EPS $0.33 and adjusted EBITDA $89.3M. Q3 2026 earnings release, 8-K exhibit 99.1 · as of
- Q3 2026 originations were $4.12B on 574,089 loans (+44% YoY in dollars); contribution margin was 60% vs 57%; conversion rate was 18.6% vs 19.4%. Q3 2026 earnings release, 8-K exhibit 99.1 · as of
- The FY2026 outlook is about $1.32B of fee revenue (down from $1.40B), about $1.35B of total revenue and about $260M of adjusted EBITDA. Q3 2026 earnings release; Benzinga 3 November 2026 · as of
- October 2026 originations were $1.249B, or $48.1M per business day; the daily pace was down 9% from September and up 26% YoY. Upstart October 2026 originations release; Q3 2026 earnings call · as of
- The UMI averaged 1.5% in Q3 vs 1.41% in Q2; the $260M EBITDA guidance assumes the UMI stays at or below 1.55 through year-end. Q3 2026 earnings call · as of
- CEO Paul Gu bought 50,000 shares on the open market at $25.55. SEC Form 4 filed 10 September 2026 · as of
- President Sanjay Datta exercised 300,000 options at $1.35 and sold 116,000 shares on the open market at $27.29. SEC Form 4 filed 10 September 2026 · as of
- Chief Accounting Officer Natalia Mirgorodskaya gave notice of her resignation, effective 30 November 2026; CFO Andrea Blankmeyer will serve as interim principal accounting officer. Form 8-K Item 5.02 filed 9 November 2026 · as of
Sources
- Upstart Holdings, Inc. - Form 8-K - FY2026 · sec.gov
- Yahoo Finance ·
- Upstart Holdings, Inc. - Form 8-K - FY2026 · sec.gov ·
- Upstart Shares Are Retreating Tuesday: What's Happening? (CORRECTED) · benzinga.com
- Upstart Holdings (UPST) Is Up 5.8% After $4 Billion Loan Pact And Conditional Bank Approval · webull.com
- FOMC Meeting Schedule · fedratecalc.com
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