Upstart ($UPST) Model 22 Revenue Guidance Case

Investors can submit applications for the lead plaintiff role.

N.D. California

Court

3:26-cv-02974

Case number

05/14/2025

Class period Start

11/04/2025

Class period End

06/08/2026

Lead Plaintiff motion deadline

$UPST investors filed a claim against Upstart for allegedly overstating how well its Model 22 AI lending model was improving approvals, conversion rates, and revenue growth.
After Upstart disclosed weaker-than-expected results and said Model 22 had overreacted to macroeconomic signals, $UPST fell 9.7% on November 5, 2025, closing at $41.75 per share.
$UPST investors can join this case to be notified about potential recovery.
Case Details:

Between May 14, 2025 and November 4, 2025, Upstart told investors its AI underwriting technology, especially Model 22, was driving more accurate risk assessment, higher approval rates, stronger conversion, and accelerating revenue growth. Executives emphasized that Model 22 improved underwriting accuracy, expanded qualified borrowers, and supported higher 2025 revenue guidance.

However, during this period, investors allege that Model 22 reacted too strongly to negative macroeconomic signals and made the company’s lending decisions too conservative. Upstart allegedly failed to disclose that Model 22 frequently overreacted to macro signals. That its claimed accuracy and approval-rate benefits were overstated, and the model’s conservatism was already hurting revenue and making 2025 guidance unreliable.

Then, on November 4, 2025, the company reported third-quarter revenue of $277 million, below guidance, and lowered fourth-quarter and full-year 2025 revenue expectations. $UPST fell $4.49, closing at $41.75. 

Additional revelations followed on November 4, 2025, including statements on the earnings call that Model 22 had “overreacted” to macroeconomic signals and had been calibrated more conservatively earlier in the quarter. 

By November 5, 2025, shares had dropped to $41.75, representing a 9.7% decline during the correction period.

Based on these events, $UPST investors filed a claim against Upstart, alleging the company:
It overstated Model 22’s performance.
It hid that the model was reacting too aggressively to macro signals and reducing approvals and conversion rates.
It misled investors about the reliability of its revenue outlook as the model’s conservatism hurt results.
Investors argue that Upstart misled the market about the accuracy and business impact of Model 22, causing losses when the truth emerged.

Case Type

US Securities Class Action

Case Status

Lead Plaintiff Submission

Alleged Offence

Misleading Statements,

Financial Misrepresentation,

Failure to Disclose,

Omissions

Suspected Party

Directors,

Management

Security Type

Stocks

Trade Direction

Long

Shock Event Date

11/04/2025

Filing date

04/07/2026

Lead Plaintiff Deadline

06/08/2026

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