Upstart Stock Is Soaring, Affirm Shares Are Falling: What's Going On With Lending Stocks?

Upstart Holdings Inc UPST and Affirm Holdings Inc AFRM shares are moving in different directions after the close Tuesday. Both companies reported quarterly results after the bell.

What Happened: Upstart reported first-quarter revenue of $103 million, which missed consensus estimates of $108.96 million. The company reported a quarterly loss of 47 cents per share, which was much better than analyst forecasts for a loss of 81 cents per share.

Upstart said it expects second-quarter revenue of $135 million versus estimates of $133.15 million.

"Despite the headwinds facing our industry, we secured multiple long-term funding agreements, together expected to deliver more than $2 billion to the Upstart platform over the next 12 months," said Dave Girouard, co-founder and CEO of Upstart.

The lending industry continues to face headwinds, but Upstart's long-term funding agreements appear to be the bright spot investors are focused on, which may be helping to propel shares higher after hours. 

Affirm reported fiscal third-quarter revenue of $380.98 million, which beat estimates of $369.97 million. The company reported a quarterly loss of 69 cents per share, which beat estimates for a loss of 92 cents per share.

Affirm guided for fiscal fourth-quarter revenue of $390 million to $415 million versus estimates of $389.67 million. The company said it expects full-year 2023 revenue of $1.532 billion to $1.557 billion versus estimates of $1.52 billion.

Both Upstart and Affirm offer lending services. Upstart operates an AI lending platform partnering with banks and credit unions to expand access to affordable credit. Affirm offers a platform for digital and mobile-first commerce.

Upstart and Affirm are also heavily shorted. Upstart has 36.3% short interest and Affirm has short interest of 21.69%, per Benzinga Pro.

UPST, AFRM Price Action: At publication time, Upstart shares were up 40% after hours at $19.72, while Affirm shares were down 8.54% at $11.25, according to Benzinga Pro.

Photo: Mike Cohen from Flickr.