Affirm Holdings (AFRM) AI Stock Analysis

• Market Cap: $12.03B
• Dividend Yield: N/A
• Average Volume (3M): 8.90M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.98
• Revenue Growth: 46.27%
• EPS Growth: 74.39%
• Country: US
• Employees: 2,006
• Sector: Technology
• Sector Strength: 40
• Industry: Software - Infrastructure
• EPS (TTM): -0.65
• Shares Outstanding: 279,294,900
• 10 Day Avg. Volume: 8,984,757
• 30 Day Avg. Volume: 8,902,446
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.67
• Price to Cash Flow (P/CF): 12.70
• P/FCF Ratio: 9.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $69.79
• Price Target Upside: 91.47% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19

Affirm Holdings' stock score reflects robust revenue growth and strategic partnerships, but is weighed down by ongoing profitability challenges and bearish technical indicators. The new Shopify agreement offers growth potential, but valuation remains a concern due to negative earnings.

Positive Factors

Financial Performance

AFRM has a strong funding program that has historically allowed it to get better terms in the capital market than the overall consumer lending industry.

Partnerships

AFRM's slate of heavyweight partners in e-commerce (e.g., Amazon, Shopify) demonstrates its capabilities, as well as allows it to go after volume from both big and small businesses more effectively than BNPL peers.

Negative Factors

Economic Conditions

There is increased uncertainty around the direction of growth and credit in the economy, which could slow GMV growth short term, having a short-term impact on profits.

Market Competition

Klarna's agreement to take over as the exclusive BNPL provider within Walmart's OnePay digital wallet raises questions about its impact on Affirm's position with large merchants.

Affirm Holdings Business Overview & Revenue Model

Company Description

Affirm Holdings, Inc. is a financial technology company that operates in the digital payments sector, primarily in the United States. Founded in 2012, Affirm provides consumers with a transparent and flexible payment option through its 'buy now, pay later' (BNPL) solutions. The company's core product allows customers to split purchases into installment payments over time, offering an alternative to traditional credit cards. Affirm partners with various merchants to integrate its services directly into the checkout process, enhancing consumer purchasing power while promoting financial responsibility.

How the Company Makes Money

Affirm makes money primarily through merchant fees and interest income. When consumers use Affirm to finance purchases, merchants pay Affirm a fee for facilitating the transaction, which is typically a percentage of the purchase amount. This fee compensates Affirm for the increased conversion rates and higher average order values that merchants experience by offering flexible payment options. Additionally, Affirm earns interest income by charging consumers who choose longer-term financing options. These consumers may incur interest charges, depending on the terms of the installment loan. Furthermore, partnerships with major retailers like Amazon and Shopify have expanded Affirm's reach and contributed significantly to its earnings by integrating Affirm's services into their platforms, thus increasing transaction volumes. Affirm also benefits from strategic partnerships with financial institutions and technology platforms, further enhancing its revenue streams.

Affirm Holdings Financial Statement Overview

Summary

Affirm Holdings has shown significant revenue growth with TTM revenue at $2.18 billion, but struggles with profitability due to high operating expenses, resulting in net losses. The balance sheet shows moderate leverage with a debt-to-equity ratio of 0.41, while cash flow management is improving with positive operating and free cash flow.

Income Statement

Affirm Holdings has shown a significant increase in revenue over the years, with the TTM revenue at $2.18 billion compared to $1.35 billion in 2022, indicating strong growth. However, the company is struggling with negative profitability metrics, such as a negative net profit margin and EBIT margin, primarily due to its high operating expenses, which has led to net losses over the observed periods.

Balance Sheet

The company's balance sheet reveals a moderate debt-to-equity ratio of 0.41 for the TTM period, suggesting reasonable leverage, but it is important to note the substantial total liabilities compared to equity. The equity ratio is improving, indicating a strengthening financial position, but the overall stability is impacted by the ongoing losses.

Cash Flow

Affirm Holdings has shown improvement in its cash flow management, with positive operating cash flow and free cash flow in the TTM period. The free cash flow to net income ratio is positive due to better cash flow management, though the company has experienced fluctuations in cash flow from financing and investing activities.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
2.80B	2.32B	1.59B	1.35B	870.46M	509.53M
	Gross Profit
2.13B	1.48B	714.82M	772.84M	540.62M	337.32M
	EBIT
-88.54M	-615.85M	-1.20B	-796.35M	-326.49M	-75.47M
	EBITDA
298.69M	-2.23M	-671.60M	-602.41M	-370.69M	-70.51M
	Net Income Common Stockholders
-198.93M	-517.76M	-985.35M	-707.42M	-430.92M	-112.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.36B	2.14B	2.07B	2.85B	1.47B	267.06M
	Total Assets
7.80B	9.52B	8.16B	6.97B	4.87B	1.40B
	Total Debt
5.09B	6.61B	5.45B	4.08B	1.91B	917.15M
	Net Debt
3.65B	5.60B	4.56B	2.82B	440.80M	650.09M
	Total Liabilities
5.29B	6.79B	5.62B	4.36B	2.29B	1.77B
	Stockholders Equity
2.51B	2.73B	2.53B	2.62B	2.58B	-367.10M
Cash Flow		Free Cash Flow
613.01M	290.84M	-108.59M	-225.50M	-213.38M	-92.32M
	Operating Cash Flow
785.80M	450.14M	12.18M	-113.80M	-193.13M	-71.30M
	Investing Cash Flow
-1.35B	-1.33B	-1.65B	-2.03B	-1.02B	-253.07M
	Financing Cash Flow
867.72M	913.15M	1.35B	2.00B	2.58B	294.73M

Affirm Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 36.45
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AFRM, the sentiment is Negative. The current price of 36.45 is below the 20-day moving average (MA) of 45.78, below the 50-day MA of 57.25, and below the 200-day MA of 48.33, indicating a bearish trend. The MACD of -3.82 indicates Negative momentum. The RSI at 37.55 is Neutral, neither overbought nor oversold. The STOCH value of 27.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AFRM.

Affirm Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PYPL	74 Outperform	$57.90B	14.36	20.00%	―	7.10%	4.45%
XYZ	73 Outperform	$31.27B	10.79	14.50%	―	10.06%	38060.98%
SOFI	64 Neutral	$10.81B	24.86	8.26%	―	29.33%	―
Sector *	57 Neutral	$18.45B	9.41	-13.97%	2.74%	5.04%	-23.56%
LC	53 Neutral	$1.00B	18.82	3.96%	―	3.63%	27.77%
UPST	53 Neutral	$3.54B	―	-20.27%	―	24.50%	49.38%
AFRM	50 Neutral	$12.03B	―	-7.34%	―	46.27%	74.39%

Affirm Holdings Corporate Events

Affirm Holdings Signs New Agreement with Shopify

On February 14, 2025, Affirm, Inc., a subsidiary of Affirm Holdings, Inc., entered into a new Global Customer Installment Program Agreement with Shopify Inc., replacing the previous agreement. This partnership makes Affirm the exclusive provider of Shop Pay Installments in the U.S. and Canada and aims to expand into new markets, including the U.K. The agreement, effective for an initial three-year term, enhances Affirm’s market positioning by broadening its reach and maintaining exclusivity with Shopify, impacting stakeholders by potentially increasing merchant adoption and consumer usage globally.