Key Takeaways
- Upstart signed a $200 million senior secured revolving credit facility, led by MUFG Bank, to help launch Upstart Bank.
- Q2 revenue rose 42% to $365 million, and Upstart earned $16.5 million, or $0.16 per share.
- The Upstart Macro Index hit 1.49, near the top of the range assumed in 2026 guidance.
- Q3 results on November 3 will show whether the $1.4 billion revenue target holds.
Upstart has spent years selling its loans to banks and investors. Now it wants a bank of its own.
Upstart Holdings (UPST) signed a $200 million senior secured revolving credit facility led by MUFG Bank. The money will support setting up and capitalizing Upstart Bank.
Shares gained 1.7% to $24 on Tuesday. (Still, that’s a stock down 53% over the past year and sitting barely above its $22 low.)
Committed money for a new bank
A revolving facility lets Upstart borrow, repay and borrow again up to a set limit, like a credit card for companies. Because it is senior secured, lenders are first in line if things go wrong.
It adds to the Castlelake forward-flow deal, under which Castlelake can buy up to $4 billion of Upstart’s consumer loans. Together they give Upstart funding that doesn’t hinge on monthly market moods.
The funding supports a business that is growing fast again…
Quarterly revenue reached $365 million in Q2, up 42% from a year earlier. Fee revenue, which Upstart earns for originating and servicing loans, rose 45% to $348 million.
Profits are back
Upstart earned $16.5 million in Q2, or $0.16 per share, versus $0.05 a year earlier. Contribution profit, what’s left from fees after borrower acquisition and servicing costs, hit a record $193 million.
“We came into this quarter with a clear plan, and we executed against it,” CEO Paul Gu said in the earnings release.
Analysts see more earnings growth ahead…
Consensus calls for EPS growth of about 37.6% a year over the next two years. Volume is holding up too, with Q3 originations at $4.12 billion.
TIKR tracks 16 analysts on Upstart. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Upstart, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Upstart’s Analyst Ratings
Credit stress is the wildcard
The Upstart Macro Index, which tracks consumer credit stress, hit 1.49 in September. That sits near the top of the range assumed in 2026 guidance. Higher stress usually means fewer approved loans and weaker loan values.
Daily origination volume also slipped to $51.6 million in Q3 from $53.9 million in Q2. So the market is pricing in risk…
Upstart trades at 7.8x forward earnings. Meanwhile, the average analyst target of $38 implies 62% upside.
My take: A bank would give Upstart cheaper, steadier funding over time, and MUFG’s backing helps. However, the low multiple shows investors fear a credit turn more than they reward growth. I’d stay cautious until guidance survives Q3.
Upstart reports on November 3. Watch whether it holds its $1.4 billion revenue and $294 million adjusted EBITDA targets.
So what is Upstart stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
