UPST Investor Alert: Upstart Holdings Securities Fraud Lawsuit - Investors With Losses May Seek to Lead the Class Action After Company Allegedly Broke Revenue Promises: Levi & Korsinsky

Promise vs. Reality: The Upstart Holdings Performance Gap

NEW YORK--(BUSINESS WIRE)--"Companies that make specific promises to investors about future performance have an obligation to disclose known risks to those projections," stated Joseph E. Levi, Esq., managing partner of Levi & Korsinsky, LLP.

Upstart Holdings, Inc. (NASDAQ: UPST) told investors its AI model was driving "full bloom" growth and raised FY 2025 revenue guidance to $1.055 billion. Months later, the Company slashed that figure to $1.035 billion and admitted its model had been "overreacting.” Shareholders lost $4.49 per share, a 9.71% decline. Find out if you qualify to recover losses from Upstart's broken guidance or contact Joseph E. Levi, Esq. at [e-mail] or [phone].

Class Period: May 14, 2025 through November 4, 2025. Lead plaintiff applications must be submitted by June 8, 2026.

The Promise

In August 2025, management substantially raised Upstart's FY 2025 revenue outlook from $1.01 billion to $1.055 billion, with revenue from fees jumping from $920 million to $990 million. The basis for this confidence was Model 22, described as driving conversion rates from 19% in Q1 to 23.9% in Q2 and powering a 159% increase in loan transaction volume. Management declared the Company was in "full bloom" growth mode and had reached GAAP profitability "a quarter sooner than expected."

The Reality

On November 4, 2025, the Company reported Q3 2025 revenue of $277 million, missing its own $280 million guidance. Conversion rates fell from 23.9% to 20.6%. Management then cut Q4 2025 revenue expectations to $288 million versus the $303.7 million Wall Street consensus and reduced FY 2025 revenue guidance to $1.035 billion. Revenue from fees was slashed to $946 million.

The Numbers: Promised vs. Actual

• FY 2025 total revenue guidance: raised to $1.055 billion in August, cut to $1.035 billion in November
• FY 2025 fee revenue: promised at $990 million, revised to $946 million, a $44 million gap
• Q2 2025 conversion rate touted at 23.9%; Q3 2025 conversion rate fell to 20.6%, a 330 basis point decline
• Q3 2025 revenue: reported $277 million vs. $280 million guidance, a miss of $3 million
• Q4 2025 revenue guidance: $288 million vs. $303.7 million consensus, $15.7 million below expectations
• Share price impact: fell $4.49 to $41.75, a 9.71% single-day loss

What the Lawsuit Alleges About the Gap

The securities action contends that when management raised guidance in August 2025, it already knew or recklessly disregarded that Model 22 was prone to overreacting to macroeconomic signals. As later admitted, the Company had "knowingly" calibrated the model to be "more conservative on the credit side in earlier parts of the quarter." The complaint charges that this known tendency rendered the raised revenue projections unreliable at the time they were issued, and that the failure to disclose Model 22's overresponsiveness violated federal securities laws.

Submit your information to pursue recovery for Upstart guidance losses or call [phone].

ABOUT LEVI & KORSINSKY, LLP -- Levi & Korsinsky, LLP is a nationally recognized shareholder rights firm. Over the past 20 years, the firm has secured hundreds of millions of dollars for aggrieved shareholders. Ranked in ISS Top 50 for seven consecutive years.

Frequently Asked Questions About the UPST Lawsuit

Q: What specific misstatements does the UPST lawsuit allege? A: The complaint alleges Upstart Holdings made materially false or misleading statements regarding Model 22's accuracy and its impact on revenue growth during the class period. When the true performance limitations were revealed, the stock price declined sharply.

Q: How much did UPST stock drop? A: Shares fell approximately 9.71%, a decline of $4.49 per share, after the Company disclosed that Model 22 had overreacted to macroeconomic signals, leading to reduced guidance. Investors who purchased shares during the class period at artificially inflated prices may be entitled to compensation.

Q: What do UPST investors need to do right now? A: Gather brokerage records including purchase dates, share quantities, and prices paid. Contact Levi & Korsinsky for a free, no-obligation evaluation at [e-mail] or [phone]. No immediate action is required to remain eligible as a class member.

Q: What if I already sold my UPST shares -- can I still recover losses? A: Yes. Eligibility is based on when you purchased, not whether you still hold them. Investors who bought during the class period and sold at a loss may still participate.

Q: What does it cost me to participate? A: Nothing. Securities class actions are handled on a pure contingency basis. No upfront fees, no retainer, no out-of-pocket costs.

Q: How long will the lawsuit take to resolve? A: Securities class actions typically take two to four years from initial filing to resolution.

Q: What is the UPST lead plaintiff deadline? A: The deadline to apply for lead plaintiff appointment is June 8, 2026. This deadline applies only to investors seeking to serve as lead plaintiff. Class members who do not apply may still participate in any recovery without taking action before this date.