Affirm Holdings: Hold Rating Maintained Amid Premium Valuation and Economic Concerns

Needham analyst Kyle Peterson has maintained their neutral stance on AFRM stock, giving a Hold rating today.

Kyle Peterson has given his Hold rating due to a combination of factors surrounding Affirm Holdings’ recent performance and market conditions. The company’s third-quarter results for fiscal year 2025 were generally in line with expectations, with margins exceeding forecasts thanks to effective cost management. Furthermore, Affirm raised its outlook for the fourth quarter, and there was an improvement in transaction volumes in April, indicating a stable business environment despite market volatility and competitive pressures from rivals like Klarna.
However, despite these positive indicators, the stock is trading at a high price-to-earnings ratio compared to its digital lending counterparts, which suggests a premium valuation. This elevated valuation, coupled with growing concerns about a potential economic downturn, leads to the conclusion that there is no immediate positive catalyst for the stock. Consequently, Peterson maintains a Hold rating, reflecting a cautious stance given the current market dynamics and valuation levels.

In another report released today, Morgan Stanley also maintained a Hold rating on the stock with a $60.00 price target.