Shares of Affirm (AFRM) are surging in today’s trading after the company revealed a new deal with retailer Costco (COST). This multi-year partnership will allow shoppers to use Affirm’s “buy now, pay later” option when shopping on Costco.com. Customers can split their payments into smaller amounts after going through a quick, real-time check to see if they qualify. The news pushed Affirm’s stock to its highest level since March, even though it’s still down overall for the year.
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Interestingly, this Costco deal is the latest in a string of partnerships for Affirm. In recent months, the company has also teamed up with Mattress Firm, World Market, and StockX in order to expand where its payment service is available. Affirm’s stock is now trading above $57, and most analysts are positive on the stock. Indeed, Barclays recently increased its price target on Affirm from $45 to $53 while maintaining an Overweight rating on the stock. The firm raised its target after a meeting with Affirm’s management.
In a note to investors, the analyst said that the company has been handling recent tariff changes well, with no major disruptions. Costco is also performing well. Earlier this month, the company reported that its April sales rose by 7% compared to the same month last year. U.S. store traffic was also up by 5%. Analysts say this shows that more shoppers are turning to Costco for better deals. With the added convenience of Affirm’s payment plan, Costco could see even more online customers looking for affordable ways to shop.
Which Stock Is the Better Buy?
Turning to Wall Street, out of the two stocks mentioned above, analysts think that AFRM stock has more room to run than COST. In fact, AFRM’s price target of $66.53 per share implies more than 15% upside versus COST’s 9%.
