Oppenheimer has started coverage of Affirm Holdings (AFRM, Financial) with an 'Outperform' rating, setting a price target at $80, suggesting a potential upside of 15%. The investment firm highlights Affirm's leadership in the Buy Now, Pay Later (BNPL) market, attributing its strengths to its advanced underwriting capabilities, solid funding strategy, strong merchant partnerships, and clear pricing structure. These advantages are expected to facilitate ongoing market share growth in the burgeoning BNPL sector.
Oppenheimer anticipates the BNPL industry could see growth rates between the high-teens to low 20s over the next couple of years. During this period, Affirm is projected to achieve at least mid-20s growth in gross merchandise volume, alongside a 20% increase in revenue minus transaction fees, and a high-20s adjusted operating income compound annual growth rate (CAGR).
Wall Street Analysts Forecast
Based on the one-year price targets offered by 20 analysts, the average target price for Affirm Holdings Inc (AFRM, Financial) is $71.46 with a high estimate of $90.00 and a low estimate of $56.00. The average target implies an upside of 3.71% from the current price of $68.90. More detailed estimate data can be found on the Affirm Holdings Inc (AFRM) Forecast page.
Based on the consensus recommendation from 25 brokerage firms, Affirm Holdings Inc's (AFRM, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Affirm Holdings Inc (AFRM, Financial) in one year is $52.20, suggesting a downside of 24.24% from the current price of $68.9. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Affirm Holdings Inc (AFRM) Summary page.
AFRM Key Business Developments
Release Date: May 08, 2025
- Revenue: Not explicitly mentioned in the transcript.
- Gross Margin: Not explicitly mentioned in the transcript.
- Net Income: Not explicitly mentioned in the transcript.
- Credit Quality: Described as excellent with strong LTV characteristics.
- Profitability Outlook: Improved outlook for the current quarter and fiscal year, aiming for GAAP profitability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Affirm Holdings Inc (AFRM, Financial) reported strong growth in Gross Merchandise Volume (GMV), with March being the strongest month at 40% year-on-year growth.
- The company is seeing excellent traction with its 0% APR product, which is attracting high credit quality customers and boosting lifetime value.
- Affirm Holdings Inc (AFRM) has successfully renewed its partnership with Shopify through 2028 without any economic concessions.
- The company has expanded its international presence, particularly in the UK, through partnerships like the one with Adyen, which accelerates integration and implementation.
- Affirm Holdings Inc (AFRM) is at the forefront of the industry in integrating and reporting back to credit bureaus, enhancing consumer credit scores and transparency.
Negative Points
- The 0% APR product, while attracting high-quality customers, generates lower revenue compared to interest-bearing loans.
- Affirm Holdings Inc (AFRM) faces a highly competitive market, with pressure on merchant fee rates and competition from both pure players and incumbents in the consumer credit space.
- The company is cautious about potential economic downturns and has increased its reserve on loan losses, indicating a conservative approach to credit risk.
- Affirm Holdings Inc (AFRM) is mindful of potential implications from student loan enforcement actions, which could affect consumer repayment behavior.
- The company acknowledges that its app improvements are ongoing, with a focus on maintaining repayment rates, which may delay the rollout of new features.
