Can Strategic Funding Deals Keep Affirm Ahead in the BNPL Space?
Affirm Holdings, Inc. AFRM has extended its long-term capital partnership with Moore Specialty Credit ('MSC'), the private asset-backed finance platform of Moore Capital Management. The renewed agreement, which now runs through May 2027, builds on a relationship that began in 2017. Over the years, Moore has invested almost $5 billion in Affirm's assets, supporting the buy now, pay later ('BNPL') company through forward flow agreements and participation in asset-backed securitizations. This extension marks more than a decade of collaboration and reflects continued confidence in Affirm's lending model.
The partnership is financially significant for Affirm, as this ensures reliable, long-term funding to support its growing loan originations. With Moore remaining a key loan buyer, Affirm can consistently convert consumer loans into liquidity, reducing reliance on its balance sheet. This strengthens Affirm's ability to maintain its zero late fee, transparent payment model while continuing to scale. The partnership also enhances Affirm's credibility with other capital providers, potentially improving financing terms and expanding access to future capital.
Affirm handled more than $33 billion in gross merchandise volume over the past year, ending March 31, 2025. Its funding capacity reached $23.3 billion, marking nine straight quarters of growth. The company has issued 24 asset-backed securitizations totaling $12.25 billion, backed by a wide range of more than 150 capital partners, highlighting its strong and diversified funding base.
Just last week, Affirmdeepened its partnership with PGIM Fixed Income by launching a new $3 billion revolving pass-through loan sale facility. These efforts, spanning both forward flow and revolving loan structures, give Affirm access to diversified, off-balance-sheet funding. This strategic approach helps Affirm grow sustainably, manage risk effectively and continue offering consumers flexible financial products.
How PayPal and Block are Expanding in the BNPL Space
PayPal Holdings, Inc. PYPL is pushing deeper into the BNPL market with the launch of a physical PayPal Credit Mastercard. This move extends BNPL usage beyond online shopping to in-store purchases. The company is also testing in-store 'Pay Later' options in Germany, part of its broader 'PayPal Everywhere' strategy aimed at increasing adoption across all retail environments.
Block, Inc. XYZ is expanding its BNPL footprint through Afterpay by embedding financing options directly into the Cash App. Eligible users can now access instalment payments within the app itself. Afterpay has also strengthened its merchant network with new retail partners such as StitchFix, PetMeds and Mejuri, boosting Block's checkout presence.
Affirm's Price Performance, Valuation and Estimates
Shares of Affirm have gained 7.8% year to date, underperforming the broader industry but outperforming the S&P 500 Index.
Affirm'sYTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Affirm trades at a forward price-to-sales ratio of 5.40X, down from the industry average. AFRM carries a Value Score of F.
The Zacks Consensus Estimate for Affirm's fiscal 2025 earnings implies a 100.6% improvement year over year, followed by massive growth next year.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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