Affirm HoldingsSTU:78P 81 WACC % is 9.05% as of Jun. 29, 2026, which is 31% above its 10-year median of 6.93. GuruFocus rates STU:78P with a GF Score™ of 81/100. The stock has 7 warning signs investors should review. Among 554 Credit Services companies, Affirm Holdings ranks worse than 96.93% on this metric.
As of today (2026-06-29), Affirm Holdings's weighted average cost of capital is 9.05%%. Affirm Holdings's ROIC % is 7.92% (calculated using TTM income statement data).
Affirm Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.
*Note: The beta of this company cannot be obtained because it has a price history shorter than 3 years. It will thus be set to 1 as default to calculate WACC.
For a comprehensive WACC calculation, please access the WACC Calculator.
Affirm Holdings (STU:78P) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Affirm Holdings's weighted average cost of capital is 9.05%%. Affirm Holdings's ROIC % is 7.92% (calculated using TTM income statement data).
Affirm Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.
*Note: The beta of this company cannot be obtained because it has a price history shorter than 3 years. It will thus be set to 1 as default to calculate WACC.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
Related Terms
Affirm Holdings WACC % Historical Data
* Premium members only.
The historical data trend for Affirm Holdings's WACC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Credit Services subindustry, Affirm Holdings's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Affirm Holdings WACC % vs Credit Services Industry
For the Credit Services industry and Financial Services sector, Affirm Holdings's WACC % distribution charts can be found below:
* The bar in red indicates where Affirm Holdings's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Affirm Holdings's market capitalization (E) is $24246.495 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, Affirm Holdings's latest one-year quarterly average Book Value of Debt (D) is $8288.4944 Mil.
a) weight of equity = E / (E + D) = 24246.495 / (24246.495 + 8288.4944) = 0.7452
b) weight of debt = D / (E + D) = 8288.4944 / (24246.495 + 8288.4944) = 0.2548
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.38%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Affirm Holdings's beta cannot be obtained because it has a price history shorter than 3 years. It will thus be set to 1 as default to calculate WACC.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.38% + 1 * 6% = 10.38%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, Affirm Holdings's interest expense (positive number) was $441.418 Mil. Its total Book Value of Debt (D) is $8288.4944 Mil.
Cost of Debt = 441.418 / 8288.4944 = 5.3257%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 12.791 / 395.213 = 3.24%.
Affirm Holdings's Weighted Average Cost Of Capital (WACC) for Today is calculated as:
WACC
=
E / (E + D)
*
Cost of Equity
+
D / (E + D)
*
Cost of Debt
*
(1 - Tax Rate)
=
0.7452
*
10.38%
+
0.2548
*
5.3257%
*
(1 - 3.24%)
=
9.05%
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Affirm Holdings (STU:78P) has a WACC % of 9.05% as of Jun. 29, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Affirm Holdings and its competitors. This is 31% above median its historical median of 6.93. Over the past decade, Affirm Holdings' WACC % has ranged from 4.30 to 21.16. According to the industry distribution chart, Affirm Holdings ranks #537 out of 554 companies in the Credit Services industry, placing it in the top 96.9%.
Is Affirm Holdings' WACC % too high?
Affirm Holdings' current WACC % of 9.05% is 31% above median its 10-year median of 6.93. Over the past 10 years, this metric has ranged from a low of 4.30 to a high of 21.16. The Credit Services industry median WACC % is 7.26. Affirm Holdings' value of 9.05% is 24.7% above this industry median. Based on the distribution chart, Affirm Holdings ranks #537 out of 554 companies in the Credit Services industry, which is in the bottom quartile relative to peers. Overall, Affirm Holdings has a GF Score™ of 81/100, reflecting its overall financial health beyond just this single metric.
How does Affirm Holdings' WACC % compare to SYF and SOFI?
According to the Credit Services industry distribution chart, Affirm Holdings ranks #537 out of 554 companies for WACC %. This places Affirm Holdings in the lower half of its industry. The industry median WACC % is 7.26. Affirm Holdings' value of 9.05% is 24.7% above this benchmark. Historically, Affirm Holdings' own WACC % has ranged from 4.30 to 21.16 over the past decade. While the company's 10-year median is 6.93 vs. the industry median of 7.26, Affirm Holdings has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a Credit Services company?
The median WACC % among Credit Services companies is 7.26, based on 554 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Affirm Holdings's current WACC % of 9.05% is 24.7% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Affirm Holdings and its competitors. For the Credit Services industry, the median WACC % is 7.26 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Affirm Holdings's current WACC % is 9.05%, which is 31% above median its own 10-year median of 6.93. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Affirm Holdings stock overvalued right now?
Affirm Holdings (STU:78P) has a current WACC % of 9.05%. The current WACC % is 9.05%, which is 31% above median its 10-year median of 6.93 and 24.7% above the Credit Services industry median of 7.26. Affirm Holdings' overall GF Score™ is 81/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Affirm Holdings (STU:78P), the current WACC % is 9.05% as of Jun. 29, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Founded in 2012, Affirm is a market leader in the buy now, pay later space with around $36 billion in transaction volume in fiscal 2025. Affirm offers both zero-interest financing, which is merchant subsidized, and interest-bearing loans, which function as personal loans that are approved on a per-transaction basis. Over 70% of Affirm's transaction volume comes from its interest-bearing loans, which also constitute the majority of its revenue. Affirm primarily operates in the United States, which accounted for more than 95% of its revenue in 2025, but it has also expanded to Canada and the United Kingdom.
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