AI lending platform Upstart (NASDAQ:UPST) will be reporting earnings tomorrow after market close. Here's what to expect.

Upstart beat analysts' revenue expectations by 3.7% last quarter, reporting revenues of $140.3 million, down 4.5% year on year. It was a mixed quarter for the company, with a decent beat of analysts' transaction volume estimates but underwhelming revenue guidance for the next quarter.

Is Upstart a buy or sell going into earnings? Read our full analysis here, it's free.

This quarter, analysts are expecting Upstart's revenue to grow 21.3% year on year to $124.8 million, a reversal from the 66.8% decrease it recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.39 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Upstart has missed Wall Street's revenue estimates three times over the last two years.

Looking at Upstart's peers in the vertical software segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Q2 Holdings delivered year-on-year revenue growth of 8.2%, beating analysts' expectations by 1.3%, and Procore Technologies reported revenues up 26.2%, topping estimates by 2.5%. Q2 Holdings traded up 15.2% following the results while Procore Technologies was also up 1.4%.

Read our full analysis of Q2 Holdings's results here and Procore Technologies's results here.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 thanks to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and while some of the vertical software stocks have fared somewhat better, they have not been spared, with share prices down 3.1% on average over the last month. Upstart is down 4.1% during the same time and is heading into earnings with an average analyst price target of $19.9 (compared to the current share price of $24.25).

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