With consumers becoming more aware of their spending habits in times of economic contraction and rising prices, companies built around personal lending can expect to experience hard times.

Upstart Holdings IncUPST and Affirm Holdings IncAFRM are releasing their quarterly earnings reports after the market close on Tuesday, and investors are expecting to see how mid-year hikes on interest rates are affecting the consumer debt market.Upstart Holdings

Shares of artificial intelligence credit information platform Upstart were rising on Tuesdayahead of the companys Q3 earnings report, which will be released at 4:30 pm EST.

The stock was up 2.09% at $19.01at the time of this writing, even though most analysts downgraded the companys one-year price target after the last earnings call.

The company is projected to report a quarterly loss at $0.08 per share on revenue of $169.42 million.

On Oct. 25, Benzingas options scanner picked up on 13 uncommon options trades for Upstart, meaning that some whales are becoming bearish on the stock.

On that same day two weeks ago, Mizuho Securities analyst Dan Dolev initiated coverage of Upstart Holdings with an Underperform rating and a price target of $17.

The overall macroeconomic environment is weighing on Upstart. With interest rates risingat an unprecedented pace, the market for personal finance products is taking a hit.

The companys low-quality borrowers and rising delinquencies, due to high-interest rates and inflation, will likely continue to weigh on the supply of funds, Dolev said in his initiation note.

Assuming the macroeconomic environment will worsen over the coming 12-18 months, we believe it is unlikely that funding for UPST will reopen en masse anytime soon, he added.

Also Read:Is It Time To Buy Amazon, Google Amid Recent Dip? What Cramer Has To SayAffirm Holdings

Consumer lending platform Affirmwill also release earnings for Q1 on Tuesday, which led to a good day for the companys stock in anticipation for the event.

Shares of AFRM were up 2.30% at $25.99at press time.

The company, which operates as a lender for consumers to finance a purchase at the point of sale, has been enjoying better analyst ratings than Upstart with mostmaintaining either Buy or Overweight ratings since August.

Price targets have been lowered, however, in recent analyst reports. Last month, Andrew Jeffrey from Truist Securities lowered Affirms one-year price target from $45 to $35.

Affirms success is largely dependent on healthy consumer spending rates with its Buy Now, Pay Later model. The current macroeconomic environment of high inflation and economic contraction is also taking a toll on Affirms shares.

Last week, the companys stock price was affected by Amazons earnings report, which reported worse-than-expected third-quarter sales results.

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