Latest news with #AffirmHoldings
Yahoo
6 hours ago
- Business
- Yahoo
Affirm Holdings, Inc. (AFRM) Is a Trending Stock: Facts to Know Before Betting on It
Affirm Holdings (AFRM) has been one of the most searched-for stocks on lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term. Shares of this operator of digital commerce platform have returned +1.6% over the past month versus the Zacks S&P 500 composite's +4.6% change. The Zacks Internet - Software industry, to which Affirm Holdings belongs, has gained 10.5% over this period. Now the key question is: Where could the stock be headed in the near term? Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision. 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. Affirm Holdings is expected to post earnings of $0.11 per share for the current quarter, representing a year-over-year change of +178.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +15.3%. The consensus earnings estimate of $0.01 for the current fiscal year indicates a year-over-year change of +100.6%. This estimate has changed +113.9% over the last 30 days. For the next fiscal year, the consensus earnings estimate of $0.70 indicates a change of +6,900% from what Affirm Holdings is expected to report a year ago. Over the past month, the estimate has changed +14.8%. Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Affirm Holdings is rated Zacks Rank #3 (Hold). The chart below shows the evolution of the company's forward 12-month consensus EPS estimate: 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 $833.89 million for the current quarter points to a year-over-year change of +26.5%. The $3.18 billion and $3.94 billion estimates for the current and next fiscal years indicate changes of +37% and +23.7%, respectively. 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. 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. As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it 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. 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
Forbes
3 days ago
- Business
- Forbes
Affirm Stock Down As Klarna's Buy Now, Pay Later Credit Loss Rises 17%
Despite recent growth, some investors see a darker future for the industry Affirm Holdings stock is down 17% in 2025 after predicting lower-than-expected growth for the current quarter While the default rate on Buy Now, Pay Later loans rises, industry executives say they're not worried A weak first quarter gross domestic product report bodes ill for the industry Shares of Affirm Holdings — a provider of Buy Now, Pay Later loans — have lost 17% of their value in 2025, according to Google Finance. In the last three years, Affirm stock has risen considerably — rising 126% to $52 a share — and the industry has expanded faster than 50% annually. After reporting solid revenue and profit growth in the company's third quarter — while issuing a weak forecast — is the stock a bargain? Earlier this month, the stock fell 13% on Affirm's weak forecast and its bet on 0% loans, according to CNBC. The bearish case is bolstered by rising BNPL default rates at Klarna and a weaker economy which could add to the bad loans. Bulls admire the company's industry leadership and long-term approach to running the company — a view Affirm reinforces. 'It took consumers and merchants and sort of the universe about a decade to figure out what we are and just how different and important what we have found to work really is,' Affirm founder and CEO Max Levchin told CNBC. Wall Street sees the stock as significantly undervalued. Affirm shares trade 29% below $67.18 — the average price target of of 21 Wall Street analysts, TipRanks wrote. In Affirm's fiscal third quarter, revenue met expectations, profit exceeded them and its revenue forecast for the fourth quarter fell short. Here are the key numbers: Affirm's online loans rise or fall depending on the level of consumer spending on electronics, apparel and travel. The company has been aiming to add new customers — reaching 22 million in the third quarter, a 10% growth rate, noted CNBC. Through partnerships with Apple , Amazon and Shopify, GMV for The Affirm Card rose 115% from the year before while the number of active cardholders more than doubled. business is closely tied to consumer spending, as its online loan offering has become popular with sellers of electronics, apparel and travel. The company is also offering 0% interest loans in which merchants — and sometimes manufacturers — boost sales by subsidizing borrowing costs to drive sales. Such loans increased 44% — serving as an alternative to a traditional merchant discount. 'It may be an expensive net discount rate, but it's better than 10% off,' Affirm Chief Financial Officer Rob O'Hare told CNBC. Affirm says these loans extend the lifetime value of its customers. 'Every time we sign someone new through a 0% promo, some number of months or quarters from now, that's a prime candidate for the Affirm Card, and that's a lifetime value booster,' Levchin said on the company's Q3 earnings call. The growth in BNPL loans has been significant in recent years. This growth has drawn new investment into the industry and loan default rates are rising for some large participants. Since 2021, the BNPL business has accelerated at a 55% average annual rate from $97 billion, according to my June 2022 Forbes post, to $560 billion in 2025, according to Research and Markets. To finance that growth, Affirm has been securitizing — bundling and selling — some 30% of its loans. More recently, the rise of private credit has enabled Affirm to sell loans directly to institutions. These include insurers such as Liberty Mutual and Prudential. Moreover, this year private credit firm Sixth Street initiated a three year deal to buy $4 billion of Affirm's loans, according to the Wall Street Journal. Recent data suggest BNPL credit problems could rise. How so? Nearly two-thirds of BNPL loans went to borrowers with risky credit scores, according to a January report from the Consumer Financial Protection Bureau. 'Americans were using 'buy now, pay later' as a Band-Aid on top of their credit card debt,' Julie Margetta Morgan, a former CFPB official who is now president of the Century Foundation, told the Times. 'We look at it as a kind of bellwether of risks to the overall economy,' she added. BNPL providers downplay these risks. For example, Klarna — the privately held Stockholm-based BNPL provider which recently paused its IPO — suffered a 17% rise in credit losses in May. Klarna said the losses were trivial. 'There's nothing troubling or worrisome from this data,' company spokeswoman Clare Nordstrom told the New York Times. Affirm was similarly upbeat. 'We really aren't seeing anything we would label as signs of stress with our borrowers,' O'Hare said, according to the Times. BNPL customers would be especially vulnerable if the economy worsened — which is why during the Biden era, the CFPB 'called for measures to safeguard them,' the Times wrote. Unfortunately, the economy contracted in the first quarter of 2025 — with gross domestic product falling at a 0.2% rate, according to the Bureau of Economic Analysis. As U.S. household finances get worse, BNPL consumers and providers could suffer. 'Consumers are going to be squeezed and more reliant on these products,' Morgan explained to the Times, 'and the companies are being offered a free pass to construct those products in ways that are the most profitable to them.' Given the 29% upside implicit in Affirm's price target, the bulls may prevail over the bears. Affirm bears argue the company's profitability fell short of expectations because the lower growth in GMV due to a surge in 0% APR loans was not sufficient to offset their revenue less transaction costs. This is why Affirm fell short of investor expectations. The rise in 0% loans 'led to a lower take rate and RLTC margin than most forecasts,' Citizens wrote, according to CNBC. Two other analysts remain bullish on Affirm. Goldman called the company a 'strong category leader in BNPL and a share gainer vs. legacy credit providers,' noted CNBC. Barclays is bullish on recent partnerships such as the one between Affirm and Costco. Affirm sees consumers continuing to spend despite uncertainty. 'People are stressed out about the economy, yet they're shopping, they're buying, and they're paying their bills — at least they're paying their bills back to us on time,' Levchin told CNBC.
Business Insider
27-05-2025
- Business
- Business Insider
Affirm (AFRM) Navigates BNPL Paradox as Growing Pains Weigh on Sentiment
Affirm Holdings (AFRM) has experienced a volatile journey since its 2021 IPO. After soaring to bubble-level valuations, the Buy Now, Pay Later (BNPL) leader saw its stock fall to $9 per share in 2023. Since then, shares have been on a steady upward trajectory, driven by notable financial improvements. However, the current valuation suggests that investor expectations are now running high, setting the stage for its fiscal Q3 2025 earnings earlier this month, which delivered beats on both revenue and earnings per share. Confident Investing Starts Here: However, Affirm's guidance for its fiscal fourth quarter fell short of investor expectations, contributing to recent stock volatility. In my view, Affirm—and the broader BNPL sector—is caught in a strategic paradox: demand for BNPL services tends to rise during inflationary periods, yet these same economic conditions heighten investor focus on sustainable growth and profitability. This tension leads me to maintain a cautiously neutral stance on Affirm's stock. Why Consumers Are Flocking to BNPL in Today's Economy The Buy Now, Pay Later (BNPL) market is positioned for significant expansion in the years ahead, with Affirm competing among a handful of major players, including Klarna, PayPal, and Afterpay (now part of Block). In its fiscal third quarter, Affirm reported a 36% year-over-year increase in Gross Merchandise Volume (GMV), reaching $8.6 billion, driven primarily by rising transaction volumes and a growing base of active users. Current macroeconomic conditions—marked by persistent inflation and more cautious consumer spending—are accelerating BNPL adoption. The ability to break large purchases into smaller, manageable payments appeals to budget-conscious consumers seeking flexibility. Moreover, BNPL is becoming a familiar option for many shoppers, and emerging data suggests that some consumers are increasingly favoring these services over traditional credit cards, which often come with hidden fees and compounding interest. Guidance Miss Spooks AFRM Investors Affirm's fiscal fourth quarter revenue guidance—ranging from $815 million to $845 million—came in below consensus expectations, which were around $840 million at the midpoint. The market reacted swiftly, with the stock falling nearly 10% following the announcement. This response highlights just how sensitive Affirm's valuation remains to any signs of slowing growth. Beyond the disappointing guidance, broader market concerns are at play. While macroeconomic headwinds such as inflation may support increased BNPL adoption, they also amplify investor focus on financial durability. Key concerns include the risk of rising consumer defaults and Affirm's still-unproven path to consistent GAAP profitability. Despite recent operational progress, the company has yet to deliver the margin stability needed to fully reassure the market. Moreover, Affirm's stock performance appears increasingly influenced by market sentiment around its ability to navigate future economic uncertainty—particularly when forward-looking guidance falls short of expectations. While the company continues to pursue GAAP profitability, signs of slowing growth and a strategic emphasis on 0% APR financing may have raised investor concerns. Although these no-interest products appeal to higher-credit consumers with stronger income profiles, they are inherently less profitable than interest-bearing loans, potentially impacting near-term margins Fintechs, Banks, and Tech Giants Fight For Market Share As with any rising consumer trend, growing popularity inevitably attracts competition. The BNPL space is now populated by both dedicated fintech players, like Affirm, and established financial institutions eager to capitalize on the demand. In my view, the barriers to entry for large financial institutions are relatively low. Tech giants such as Apple and Google are integrating BNPL features directly into their ecosystems, potentially diminishing the relevance of standalone providers like Affirm. At the same time, major banks like JPMorgan Chase and Citibank are embedding BNPL-like options within existing credit card offerings, further intensifying competitive pressure. Is AFRM a Buy, Sell, or Hold? AFRM's average price target of $67.18 implies a potential upside of 36% in the next twelve months. Earlier this month, Wells Fargo analyst Andrew Bauch supported the bullish case for AFRM, issuing a Buy rating with a price target of $67. Bauch highlighted Affirm's strong GMV growth and was also encouraged by the 18% quarter-over-quarter growth in active cardholders. For context, the Affirm Card is a Visa card that permits full or split purchases, effectively becoming a more regular spending tool for consumers rather than just being used for individual online checkouts. Meanwhile, Morgan Stanley analyst James Faucette has a Hold rating on AFRM. He is cautiously optimistic on the stock, noting 'despite the macroeconomic volatility that poses risks to credit performance, Affirm's delinquency data remains strong, and insights from other consumer finance companies are generally positive.' Early BNPL Lead Meets Unproven Profit Path In summary, the BNPL market remains in its early stages, bringing both opportunity and risk. Affirm's early entry has helped build brand recognition, a growing user base, and strategic partnerships. With the overall market still expanding, there is significant upside if Affirm can capitalize on its foundation. For example, the company's card integration with platforms like Apple Pay enhances accessibility and broadens consumer reach. However, the path forward is far from certain. The BNPL sector faces meaningful regulatory and economic unknowns, having yet to be tested by a full economic downturn. The market is increasingly fragmented, and Affirm may need to prioritize brand differentiation, potentially at the expense of near-term profitability. Perhaps most importantly, its ability to consistently deliver GAAP profitability remains uncertain. In business, generating revenue is not enough—sustainable cash generation is what ensures survival. Overall, I remain neutral on Affirm (AFRM). At its current valuation, the stock appears to reflect both the growth potential and the underlying challenges of the BNPL paradox.
Business Insider
25-05-2025
- Business
- Business Insider
Analysts Conflicted on These Technology Names: Affirm Holdings (AFRM), Entegris (ENTG) and Amplitude (AMPL)
Companies in the Technology sector have received a lot of coverage today as analysts weigh in on Affirm Holdings (AFRM – Research Report), Entegris (ENTG – Research Report) and Amplitude (AMPL – Research Report). Confident Investing Starts Here: Affirm Holdings (AFRM) Seaport Global analyst Jeff Cantwell maintained a Hold rating on Affirm Holdings on May 10. The company's shares closed last Friday at $49.30. According to Cantwell is a 5-star analyst with an average return of 11.1% and a 57.6% success rate. Cantwell covers the Technology sector, focusing on stocks such as Holdings, Shift4 Payments, and ACI Worldwide. Affirm Holdings has an analyst consensus of Strong Buy, with a price target consensus of $67.18, implying a 42.1% upside from current levels. In a report issued on May 9, Morgan Stanley also maintained a Hold rating on the stock with a $60.00 price target. Entegris (ENTG) In a report issued on May 8, Bhavesh Lodaya from BMO Capital reiterated a Buy rating on Entegris, with a price target of $100.00. The company's shares closed last Friday at $72.34. According to Lodaya is ranked #4146 out of 9562 analysts. Entegris has an analyst consensus of Strong Buy, with a price target consensus of $101.29, implying a 44.0% upside from current levels. In a report issued on May 7, Needham also maintained a Buy rating on the stock with a $100.00 price target. Amplitude (AMPL) In a report issued on May 8, Koji Ikeda from Bank of America Securities reiterated a Buy rating on Amplitude, with a price target of $13.00. The company's shares closed last Friday at $12.04. According to Ikeda is a 5-star analyst with an average return of 12.6% and a 58.4% success rate. Ikeda covers the Technology sector, focusing on stocks such as Zeta Global Holdings Corp, Onestream, Inc. Class A, and ZoomInfo Technologies. Amplitude has an analyst consensus of Moderate Buy, with a price target consensus of $13.44, which is a 12.1% upside from current levels. In a report issued on April 23, Piper Sandler also maintained a Buy rating on the stock with a $14.00 price target.
Yahoo
16-05-2025
- Business
- Yahoo
Why Affirm Holdings (AFRM) Stock Crashed Yesterday
We recently compiled a list of the Traders Flee These 10 Stocks Today. In this article, we are going to take a look at where Affirm Holdings, Inc. (NASDAQ:AFRM) stands against other stocks that crashed yesterday. Wall Street's main indices ended mixed on Thursday as investors continued to digest a series of first-quarter earnings and key economic data. Among the three indices, only the Nasdaq registered losses, down 0.18 percent. In contrast, the Dow Jones grew by 0.65 percent while the S&P 500 rose by 0.41 percent. Meanwhile, 10 companies registered hefty losses during the session, battered by a flurry of negative news, missed estimates, and a weak outlook for the rest of the year. In this article, let us explore the 10 companies that lag in performance and identify the reasons behind their decline. To come up with the list, we considered only the stocks with a $2 billion market capitalization and $5 million in trading volume. An entrepreneur launching her new brand on the company's platform, looking confident and joyful. Affirm Holdings snapped a three-day winning streak on Thursday, losing 8.49 percent to close at $51.75 apiece, as investor sentiment was dampened by a weak outlook for the rest of the year. According to Affirm Holdings, Inc. (NASDAQ:AFRM) CEO Max Levchin, its business from 0 percent APR installments generates lower revenues than its other products. 'We continued to lean into 0 percent APR monthly installments, which grew 44 percent year over year, and constituted 13 percent of total GMV, the highest level in the past two years," Levchin said. "While the revenue and RLTC (revenue less transaction costs) content in such transactions is marginally lower compared to interest-bearing loans, they attract higher credit quality consumers to Affirm, drive outsized point of sale conversion for merchants, and build our brand equity,' he added. Looking ahead, Affirm Holdings, Inc. (NASDAQ:AFRM) expects full-year revenues to increase to between $3.163 billion and $3.193 billion, up from its earlier outlook of $3.13 billion to $3.19 billion previously. Overall, AFRM ranks 6th on our list of stocks that traders flee today. While we acknowledge the potential of AFRM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AFRM but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: and . Disclosure: None. This article is originally published at . Sign in to access your portfolio
