Analyst Ken Shih from DBS maintained a Buy rating on Affirm Holdings (AFRM – Research Report) and increased the price target to $86.00 from $80.00.
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Ken Shih has given his Buy rating due to a combination of factors, including Affirm Holdings’ impressive growth in gross merchandise volume (GMV) and the easing of credit concerns. The company’s revenues for the second quarter of fiscal year 2025 surpassed expectations, showcasing a 47% year-over-year increase and a surprising earnings per share of USD 0.23. This growth was largely driven by increased sales in general merchandise, travel, and consumer electronics during the holiday season.
Furthermore, Affirm’s strategic partnerships with major retailers like Amazon and Walmart, and merchant acquirers such as Stripe and Adyen, have significantly expanded its customer reach and transaction frequency. The introduction of the Affirm Card has further contributed to this growth, allowing consumers to use credit beyond Affirm’s integrated merchants. Additionally, the favorable outlook on the U.S. labor market and potential regulatory easing could further enhance Affirm’s portfolio credit quality, bolstering its revenue outlook. These factors, along with Affirm’s strong market position in the rapidly growing Buy Now, Pay Later sector, support the Buy rating with a target price of USD 86.
In another report released on February 10, Barclays also maintained a Buy rating on the stock with a $85.00 price target.