What happened
Better-than expected quarterly fundamentals couldn't prevent Upstart Holdings' (UPST 2.76%) stock from slipping on Tuesday. After the company reported results from its second frame of the year, Upstart's share price declined to the point where it matched the dip of the S&P 500 index on the day, at 0.4%.
So what
Upstart's second quarter saw the fintech earn revenue of almost $136 million, which was a somewhat dispiriting 40% drop from the same period of 2022. On a more positive note the company flipped to a non-GAAP (adjusted) profit of $5.4 million, or $0.06 per share.
That also represented a year-over-year improvement, as the second quarter adjusted net income figure was $1 million.
Both headline figures exceeded the average prognosticator estimate. On average, pundits following Upstart stock were anticipating the company would earn slightly over $135 million on the top line. They were also modeling an adjusted net loss of $0.07 per share.
Upstart management attributed the company's performance to a push to improve efficiency and operating leverage. As for its immediate future, the fintech quoted CEO Dave Girouard as saying that it "has the opportunity to grow quickly and profitably when we return to a normalized economy."
"We're in the pole position to lead the industry to an AI-enabled future that dramatically improves access to credit for hundreds of millions of Americans," he added.
Now what
Upstart certainly did not have a bad quarter, particularly in light of that flip into adjusted profitability.
The company might be a victim of lingering negative sentiment. A new research note published on Monday by Morgan Stanley analyst James Faucette asserted that finance companies specializing in credit continue to struggle with relatively high levels of delinquencies.
