Here's Why Affirm Holdings (AFRM) is a Strong Momentum Stock
Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.
Is This 1 Momentum Stock a Screaming Buy Right Now?
For momentum investors, upward or downward trends in a stock's price or earnings outlook take precedent, so they'll want to zero in on the Momentum Style Score. This Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
Affirm Holdings (AFRM)
Founded in 2012 and headquartered in San Francisco, CA, Affirm Holdings, Inc. is a financial technology company specializing in payment solutions that provide consumers with flexible, transparent installment loans — both interest-free and interest-bearing — at the point of sale. By partnering with a diverse range of merchants, Affirm enables customers to pay for purchases over time.
AFRM sits at a Zacks Rank #3 (Hold), holds a Momentum Style Score of B, and has a VGM Score of B. The stock is up 10.2% and up 10.5% over the past one-week and four-week period, respectively, and Affirm Holdings has gained 209.9% in the last one-year period as well. Additionally, an average of 5,139,581 shares were traded over the last 20 trading sessions.
Momentum investors also pay close attention to a company's earnings. For AFRM, one analyst revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.02 to $0.05 per share for 2025. AFRM boasts an average earnings surprise of 102.2%.
AFRM should be on investors' short list because of its impressive earnings fundamentals, a good Zacks Rank, and strong Momentum and VGM Style Scores.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Affirm Holdings, Inc. (AFRM) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
2 hours ago
- Yahoo
CAVA vs. Chipotle (CMG): What's the Better Buy?
A notable restaurant duo, Chipotle Mexican Grill CMG and CAVA Group CAVA, both faced pressure following the release of their quarterly results, adding fuel to the already-poor share performance from each in 2025. Image Source: Zacks Investment Research With both stocks coming well off all-time highs, it raises a valid question – what's the better pick moving forward? Let's take a closer look. CAVA Faces Downward Revisions CAVA posted mixed results relative to our consensus estimates, exceeding the Zacks Consensus EPS estimate by 23% but falling short of sales expectation by nearly 3%. Sales were up 20% YoY, whereas earnings were down 15% from the year-ago period. While the sales growth is undoubtedly strong, it was primarily driven by the opening of new locations, with CAVA opening 16 new restaurants throughout the period. But what investors didn't like was comparable restaurant sales growth of 2.1%, a far cry from the 10.8% mark in the prior quarter. CAVA's restaurant operating margin also totaled 26.3%, down from the 26.5% mark a year-ago. Further, comparable restaurant sales growth of 2.1% primarily came from higher menu prices, with guess traffic being roughly flat. CAVA trimmed guidance across several metrics, most notably comparable restaurant sales growth, now expecting growth in a band of 4 – 6% compared to 6 – 8% prior for its FY25. The slowing growth in its existing locations paired with decreased traffic helps explain the poor share reaction post-earnings, with analysts also recalculating their EPS and sales expectations following the print and downwardly revised guidance. The stock is currently a Zacks Rank #4 (Sell). Image Source: Zacks Investment Research CMG Trims Guidance CMG's results were similarly mixed concerning our consensus expectations, with the company posting a 3% EPS beat while falling short of sales expectations by roughly 1.2%. Sales were up 3% year-over-year, whereas earnings fell 3% from the year-ago period. Notably, comparable restaurant sales fell 4% year-over-year. The company also trimmed its FY25 comparable restaurant sales growth guidance to flat year-over-year, which compares to a previously anticipated low-single-digit range. Like CAVA, the company's existing restaurants also faced a profitability crunch, with its restaurant level operating margin contracting to 27.4% vs. 28.9% in the year-ago period. Analysts haven't had the same bearish reaction post-earnings concerning their revisions, with expectations for CMG largely remaining stable post-earnings and even increasing for its next release. CMG is currently a Zacks Rank #3 (Hold). Image Source: Zacks Investment Research What's The Better Buy? While Chipotle Mexican Grill CMG and CAVA Group CAVA both reflect intriguing options for restaurant exposure, the reality remains that they've faced considerable share pressure from weak quarterly results that have revealed slowing growth. Concerning the valuation picture, CAVA's trading at a premium to CMG, with CMG's restaurant margins just as strong (and with a history of consistency) while its EPS outlook also remains much more constructive. The Zacks Rank #4 (Sell) rating on CAVA reflects a tough near-term outlook concerning share performance, whereas a largely-stable EPS picture for CMG keeps it a Zacks Rank #3 (Hold). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report CAVA Group, Inc. (CAVA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 hours ago
- Yahoo
Interactive Brokers Group, Inc. (IBKR) is a Great Momentum Stock: Should You Buy?
Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the "long context," investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades. Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us. Below, we take a look at Interactive Brokers Group, Inc. (IBKR), which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions. It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Interactive Brokers Group, Inc. currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of "A or B" outperform the market over the following one-month period. You can see the current list of Zacks #1 Rank Stocks here >>> Set to Beat the Market? Let's discuss some of the components of the Momentum Style Score for IBKR that show why this company shows promise as a solid momentum pick. Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area. For IBKR, shares are up 3.62% over the past week while the Zacks Financial - Investment Bank industry is up 1.52% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 7.56% compares favorably with the industry's 3.25% performance as well. While any stock can see its price increase, it takes a real winner to consistently beat the market. That is why looking at longer term price metrics -- such as performance over the past three months or year -- can be useful as well. Shares of Interactive Brokers Group, Inc. have increased 23.68% over the past quarter, and have gained 112.61% in the last year. On the other hand, the S&P 500 has only moved 10.12% and 19.99%, respectively. Investors should also take note of IBKR's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now IBKR is averaging 5,354,713 shares for the last 20 days.. Earnings Outlook The Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with IBKR. Over the past two months, 4 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost IBKR's consensus estimate, increasing from $1.76 to $1.96 in the past 60 days. Looking at the next fiscal year, 4 estimates have moved upwards while there have been no downward revisions in the same time period. Bottom Line Taking into account all of these elements, it should come as no surprise that IBKR is a #1 (Strong Buy) stock with a Momentum Score of B. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep Interactive Brokers Group, Inc. on your short list. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 hours ago
- Yahoo
Investors Heavily Search Affirm Holdings, Inc. (AFRM): Here is What You Need to Know
Affirm Holdings (AFRM) is one of the stocks most watched by visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock. Over the past month, shares of this operator of digital commerce platform have returned +10.9%, compared to the Zacks S&P 500 composite's +3.3% change. During this period, the Zacks Internet - Software industry, which Affirm Holdings falls in, has gained 6.1%. The key question now is: What could be the stock's future direction? While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making. Revisions to Earnings Estimates Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock. Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements. For the current quarter, Affirm Holdings is expected to post earnings of $0.11 per share, indicating a change of +178.6% from the year-ago quarter. The Zacks Consensus Estimate has changed +56.3% over the last 30 days. For the current fiscal year, the consensus earnings estimate of $0.05 points to a change of +103% from the prior year. Over the last 30 days, this estimate has changed +2.3%. For the next fiscal year, the consensus earnings estimate of $0.76 indicates a change of +0% from what Affirm Holdings is expected to report a year ago. Over the past month, the estimate has changed +2.7%. With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Affirm Holdings. The chart below shows the evolution of the company's forward 12-month consensus EPS estimate: 12 Month EPS Projected Revenue Growth While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth. In the case of Affirm Holdings, the consensus sales estimate of $839.88 million for the current quarter points to a year-over-year change of +27.4%. The $3.19 billion and $3.92 billion estimates for the current and next fiscal years indicate changes of +37.2% and +22.8%, respectively. Last Reported Results and Surprise History Affirm Holdings reported revenues of $783.14 million in the last reported quarter, representing a year-over-year change of +35.9%. EPS of $0.01 for the same period compares with -$0.43 a year ago. Compared to the Zacks Consensus Estimate of $783.85 million, the reported revenues represent a surprise of -0.09%. The EPS surprise was +111.11%. The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates three times over this period. Valuation No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance. While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price. The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued. Affirm Holdings is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade. Conclusion The facts discussed here and much other information on might help determine whether or not it's worthwhile paying attention to the market buzz about Affirm Holdings. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Affirm Holdings, Inc. (AFRM) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
