tiprankstipranks
Trending News
More News >
Affirm Holdings, Inc. (AFRM)
:AFRM

Affirm Holdings (AFRM) AI Stock Analysis

Compare
4,912 Followers

Top Page

AF

Affirm Holdings

(NASDAQ:AFRM)

Rating:61Neutral
Price Target:
$57.00
▼(-6.33%Downside)
Affirm Holdings shows robust revenue growth and positive market momentum, supported by strategic partnerships and a positive earnings call sentiment. However, significant concerns remain due to profitability challenges, high negative P/E, and valuation pressures. A balanced approach to growth and profitability, along with strategic initiatives, provide a moderately positive outlook with room for improvement.
Positive Factors
Growth Opportunities
Affirm Card traction continues to be a bright spot, up 115% year-over-year and representing 9% of total company GMV.
Market Position
Affirm is considered the best-positioned BNPL provider in a burgeoning market aimed at revolutionizing consumer credit.
Partnerships
Affirm has substantially broadened its distribution, reaching more customers and improving transaction frequency thanks to partnerships with high-profile merchants such as Amazon and Walmart.
Negative Factors
Financial Performance
Revenue and RL TC underperformance versus investor expectations and F4Q25 GMV outlook deceleration are key drivers of the ~8% after-hours decline.
Margin Concerns
An increasing mix towards 0% APR due to increased promotion from partners led to lower-than-expected margins.
Regulatory and Credit Risks
Downside risks include deterioration of customer credit profile, stricter regulatory supervision, and loss of major enterprise merchant partners.

Affirm Holdings (AFRM) vs. SPDR S&P 500 ETF (SPY)

Affirm Holdings Business Overview & Revenue Model

Company DescriptionAffirm Holdings, Inc. operates a platform for digital and mobile-first commerce in the United States and Canada. The company's platform includes point-of-sale payment solution for consumers, merchant commerce solutions, and a consumer-focused app. Its payments network and partnership with an originating bank, enables consumers to pay for a purchase over time with terms ranging from one to forty-eight months. As of June 30, 2021, the company had approximately 29,000 merchants integrated on its platform covering small businesses, large enterprises, direct-to-consumer brands, brick-and-mortar stores, and companies. Its merchants represent a range of industries, including sporting goods and outdoors, furniture and homewares, travel, apparel, accessories, consumer electronics, and jewelry. The company was founded in 2012 and is headquartered in San Francisco, California.
How the Company Makes MoneyAffirm 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 Key Performance Indicators (KPIs)

Any
Any
Active Consumers
Active Consumers
Tracks the number of unique users who have made a purchase using Affirm, reflecting customer engagement and growth potential.
Chart InsightsAffirm Holdings has seen a consistent rise in active consumers, reaching 21.9 million by early 2025. This growth aligns with their strategic focus on enhancing consumer value through 0% APR promotions and strong partnerships with major retailers like Costco and Shopify. Despite a competitive market and increased loan loss reserves, Affirm's commitment to credit quality and profitability is evident. The company's positive financial outlook and robust GMV growth, particularly a 40% year-on-year increase in March, underscore its potential for sustained expansion and market leadership.
Data provided by:Main Street Data

Affirm Holdings Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q3-2025)
|
% Change Since: 12.15%|
Next Earnings Date:Aug 21, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong overall performance, highlighted by significant growth in GMV, positive financial outlook, and successful strategic partnerships. However, challenges such as increased loan loss reserves and competitive pressures were noted. Despite these concerns, the sentiment remains optimistic due to healthy credit performance and strategic initiatives.
Q3-2025 Updates
Positive Updates
Strong Growth in Gross Merchandise Volume (GMV)
GMV growth was broad-based, with a 40% year-on-year increase in March, driven by strong performance across various merchant categories and direct-to-consumer services.
Improved Financial Outlook
The company is pleased to improve its outlook for the current quarter and the fiscal year, leaning into growth opportunities with excellent credit quality while balancing growth and profitability.
Successful 0% APR Promotions
Affirm experienced excellent traction with its 0% APR product, which drives brand halo and consumer attachment, leading to high credit quality and increased conversion rates.
Partnerships and Expansions
Affirm announced a partnership with Costco and renewed its agreement with Shopify through 2028, indicating strong merchant relationships and expansion opportunities.
Healthy Credit Performance
The company reports healthy repayment rates and an increase in prepayments, indicating strong consumer credit performance.
Negative Updates
Increased Allowance for Loan Losses
There was a slight uptick in the reserve on loan losses, although the company attributes it to changes in loan mix due to higher prepayments.
Competitive Market Environment
The market remains highly competitive, with pressures on merchant discount rates and the need for Affirm to continuously drive impact for merchant partners.
Impact of Regulatory Environment
Affirm is mindful of potential impacts from student loan enforcement and regulatory scrutiny, although it currently doesn't anticipate significant issues.
Company Guidance
In the Affirm Holdings Third Quarter Fiscal 2025 earnings call, the company provided guidance indicating an improvement in their outlook for the current quarter and fiscal year. They highlighted a strategic focus on growth opportunities with strong credit quality and lifetime value (LTV) characteristics. The call emphasized Affirm's commitment to balancing growth with profitability as they aim to become a GAAP profitable business. The company noted that they will continue to be prudent with their spending to seize market opportunities, while ensuring excellent credit performance. Affirm also mentioned positive traction with their 0% APR product, which, despite lower revenue and return on loan-to-cost (RLTC) compared to interest-bearing loans, offers superior credit quality and long-term customer value. Additionally, the company reported broad-based growth in Gross Merchandise Volume (GMV), with March showing a peak 40% year-on-year increase, driven by strong performance across both direct-to-consumer services and their merchant base.

Affirm Holdings Financial Statement Overview

Summary
Affirm Holdings shows strong revenue growth, with significant increases in TTM revenue. However, persistent challenges with profitability and high operating expenses leading to net losses, along with a moderate debt-to-equity ratio, affect the stability. Improved cash flow management supports future prospects, but leveraging and profitability remain key issues.
Income Statement
45
Neutral
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
50
Neutral
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
58
Neutral
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
TTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income StatementTotal Revenue
3.01B2.32B1.59B1.35B870.46M509.53M
Gross Profit
2.15B1.48B714.82M772.84M540.62M337.32M
EBIT
-75.94M-615.85M-1.20B-796.35M-326.49M-75.47M
EBITDA
304.17M0.00-671.60M-602.41M-370.69M-70.51M
Net Income Common Stockholders
-62.19M-517.76M-985.35M-707.42M-430.92M-112.60M
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.13B2.14B2.07B2.85B1.47B267.06M
Total Assets
10.44B9.52B8.16B6.97B4.87B1.40B
Total Debt
7.36B6.61B5.45B4.08B1.91B917.15M
Net Debt
6.01B5.60B4.56B2.82B440.80M650.09M
Total Liabilities
7.56B6.79B5.62B4.36B2.29B1.77B
Stockholders Equity
2.87B2.73B2.53B2.62B2.58B-367.10M
Cash FlowFree Cash Flow
608.71M290.84M-108.59M-225.50M-213.38M-92.32M
Operating Cash Flow
788.03M450.14M12.18M-113.80M-193.13M-71.30M
Investing Cash Flow
-1.17B-1.33B-1.65B-2.03B-1.02B-253.07M
Financing Cash Flow
510.13M913.15M1.35B2.00B2.58B294.73M

Affirm Holdings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price60.85
Price Trends
50DMA
50.02
Positive
100DMA
54.21
Positive
200DMA
53.51
Positive
Market Momentum
MACD
2.99
Negative
RSI
62.04
Neutral
STOCH
60.13
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AFRM, the sentiment is Positive. The current price of 60.85 is above the 20-day moving average (MA) of 54.82, above the 50-day MA of 50.02, and above the 200-day MA of 53.51, indicating a bullish trend. The MACD of 2.99 indicates Negative momentum. The RSI at 62.04 is Neutral, neither overbought nor oversold. The STOCH value of 60.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AFRM.

Affirm Holdings Risk Analysis

Affirm Holdings disclosed 57 risk factors in its most recent earnings report. Affirm Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Affirm Holdings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$24.03B177.1411.06%26.72%
74
Outperform
$8.11B30.9430.28%27.39%115.40%
73
Outperform
$2.41B22.2715.97%14.86%-0.94%
DLDLO
72
Outperform
$2.94B22.4826.10%33.84%0.29%
MQMQ
68
Neutral
$2.61B55.535.01%-8.44%
62
Neutral
$11.97B10.29-7.47%2.99%7.32%-8.06%
61
Neutral
$19.63B-2.26%42.54%91.01%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AFRM
Affirm Holdings
59.90
29.37
96.20%
FOUR
Shift4 Payments
92.03
22.99
33.30%
PAYO
Payoneer
6.59
1.19
22.04%
MQ
Marqeta
5.57
0.48
9.43%
DLO
DLocal
10.29
3.16
44.32%
TOST
Toast Inc
42.63
18.59
77.33%

Affirm Holdings Corporate Events

Product-Related AnnouncementsBusiness Operations and Strategy
Affirm Holdings Signs New Agreement with Shopify
Positive
Feb 20, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.