Replies to post #95135 on Savvy Trades and Investments

[wadegarret]

UPST contribution margin only 45% for 2022

is what's causing the problem. I mean they just posted $.89 non gaap adjusted eps for the Dec qtr with a contribution margin of 52%. They guided for for Adjusted Net Income for Q1 2022 of $51M, and gave a fully diluted share count of 95.9M. They also said the contribution margin for Q1 was to be 46%. That would mean Q1 non gaap adjusted eps will come in at $.53, which is far less than the $.89 for Q4 2021 despite about the same total revenues being guided for of $305M. The hugely lower eps in Q1 2022 vs Q4 2021 is obviously mostly for the much lower contribution margins.

For fiscal 2022, they are guiding for only 45% contribution margins, and revenues of $1.4B. Since they are guiding for .53 eps for Q1 on 46% margins and $300M revenues, we can now extrapolate what the $1.4B revenues being guided for 2022 will bring in. My estimate is for around
$2.40 in adjusted non gaap eps. The stock is super expensive at a 60 PE going forward precisely for the reason that revenue run rate is $350M/qtr for 2022 vs $305M for Q4 2021. So revenue growth rate going forward for 2022 is expected to be 15% more than Q4 2021 annaulized. Not only that, but eps for 2022 is expected to be far less than Q4 2021 annualized for the substantially lower contribution margins being guided for in 2022. I wouldn't touch the stock