Upstart (NASDAQ:UPST) is scheduled to announce its earnings on Tuesday, May 6, 2025. Historically, UPST stock has shown considerable volatility surrounding its earnings announcements. Since 2021, the stock has reported a positive one-day return in 53% of cases. When these returns are positive, they have been substantial, with a median of 34.6% and a maximum of 89.3% recorded in March 2021.
For event-driven traders, grasping these historical trends could provide a potential advantage, though a lot will hinge on how the actual results stack up against consensus estimates and market anticipations. There are two main strategies to exploit this:
- Pre-Earnings Positioning: Evaluate historical probabilities of positive returns and take positions before the earnings announcement.
- Post-Earnings Correlation Analysis: Analyze the historical correlation between immediate and medium-term stock performance following earnings announcements and position accordingly after the announcement.
Ahead of the forthcoming earnings, consensus estimates forecast earnings per share (EPS) of $0.17 on revenue of $201 million. This indicates significant year-over-year growth compared to the prior period, where Upstart reported a loss of $0.31 per share on revenue of $128 million.
From a fundamental standpoint, Upstart currently holds a market capitalization of $4.4 billion. Over the trailing twelve months, the company has generated $629 million in revenue but reported a net loss of $129 million.
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Upstart Stock Historical Odds Of Positive Post-Earnings Return
Here are some insights on one-day (1D) post-earnings returns:
- There have been 17 earnings data points documented over the past five years, with 9 positive and 8 negative one-day (1D) returns recorded. In total, positive 1D returns were observed about 53% of the time.
- However, this percentage drops to 42% if we look at data for the past 3 years instead of 5.
- The median of the 9 positive returns is 35%, while the median of the 8 negative returns is -19%.
Additional information regarding observed 5-Day (5D) and 21-Day (21D) returns post earnings are summarized alongside the statistics in the table below.
Upstart Stock Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky approach (though not effective if the correlation is weak) is to comprehend the correlation between short-term and medium-term returns after earnings, identify a pair with the highest correlation, and carry out the suitable trade. For instance, if 1D and 5D display the strongest correlation, a trader might take a “long” position for the next 5 days if the 1D post-earnings return is positive. Below is some correlation data based on a 5-year and a 3-year (more recent) timeframe. Remember that the correlation 1D_5D indicates the correlation between 1D post-earnings returns and following 5D returns.
Is There Any Correlation of Upstart Stock With Peer Earnings?
Occasionally, the performance of peers can impact the stock’s reaction after earnings. Indeed, the pricing-in might commence before the earnings are disclosed. Below is some historical data regarding the post-earnings performance of Upstart stock in comparison to the performance of peers that reported earnings right before Upstart. For an accurate comparison, peer stock returns also reflect post-earnings one-day (1D) returns.
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