-I don’t think it makes sense to sell out just because Upstart got better at forecasting their own revenue. I do think it makes sense to trim due to the obvious risks (both macro and executional) and the lumpiness of the revenue.
-I cut back from 22% after earnings to a more reasonable 15%.
-Is it Upstart’s fault the market thought they could keep up the ridiculous forecast raises? It’s like blaming a ball player because you drafted him number 1 and he ends up as an all-star in year 3, instead of year 2. This type of stock takes more patience than SaaS and more long term orientation.
-Upstart is nothing like Peloton. Peloton was a widget-selling COVID play that got killed by gyms reopening and also supply chain costs/constraints.
-My mistake was going over 20% into earnings, which was a bit outside my comfort zone, especially for non-Saas. I was at 24.6% going into earnings. Jonwayne’s google analytic numbers as well as similar analysis from seeking alpha had me and most of the folks around here thinking Q3 would be a much bigger beat.
https://seekingalpha.com/article/4466885-upstart-upst-stock-…
We were wrong but the numbers below and Q4 guidance are quit juicy. Where else are you going to find another company with these kind of numbers, excellent leadership, and a rapidly expanding TAM?
-Revenue of $228 million, up 250% yoy
-Fee revenue of $210 million, up 235% yoy
-Transaction volume of loans originated on the platform up 244%
-Operating income was $28.6 million, up 134%.
-Net Income was $57 million up 367%
-Adj EBITDA was $59 million, up $15.5 million
-Adj EBITDA margin was 26% of revenue, up from 24%.