Affirm Holdings (AFRM) AI Stock Analysis

• Market Cap: $25.15B
• Dividend Yield: N/A
• Average Volume (3M): 5.20M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.82
• Revenue Growth: 42.54%
• EPS Growth: 91.01%
• Country: US
• Employees: 2,006
• Sector: Technology
• Sector Strength: 83
• Industry: Software - Infrastructure
• EPS (TTM): N/A
• Shares Outstanding: 281,825,620
• 10 Day Avg. Volume: 5,139,994
• 30 Day Avg. Volume: 5,202,082
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.80
• Enterprise Value/Revenue: 6.72
• Enterprise Value/Gross Profit: 9.39
• Enterprise Value/Ebitda: 42.43
• 1Y Price Target: $80.13
• Price Target Upside: 3.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

• Rating: 61 Neutral
• Price Target: $57.00 ▼(-26.54% 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

Credit performance

Credit performance remains robust; 30+ day delinquencies at 2.31%, down 34 basis points.

E-commerce partnerships

Momentum at top customers Shopify and Amazon, estimated at over 50% of GMV, will at least offset potential pressures.

Growth initiatives

Affirm is set up to beat Street FY26 GMV estimates, with a focus on new initiatives like the Affirm Card and international expansion.

Negative Factors

Competitive pressure

Synchrony's competitive product will take some share from Affirm.

Margin pressure

A higher mix of non-interest-bearing transactions is likely to pressure margins, creating additional challenges for Affirm Holdings.

Walmart relationship

The potential headwind associated with the loss of exclusivity with Walmart is a concern.

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 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

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.01B	2.32B	1.59B	1.35B	870.46M	509.53M
Gross Profit	2.15B	1.48B	714.82M	772.84M	540.62M	337.32M
EBITDA	476.62M	0.00	-671.60M	-602.41M	-370.69M	-70.51M
Net Income	-62.19M	-517.76M	-985.35M	-707.42M	-430.92M	-112.60M
Balance Sheet
Total Assets	10.44B	9.52B	8.16B	6.97B	4.87B	1.40B
Cash, Cash Equivalents and Short-Term Investments	2.13B	2.14B	2.07B	2.85B	1.48B	267.06M
Total Debt	7.36B	6.61B	5.45B	4.14B	1.98B	917.15M
Total Liabilities	7.56B	6.79B	5.62B	4.36B	2.29B	1.77B
Stockholders Equity	2.87B	2.73B	2.53B	2.62B	2.58B	-367.10M
Cash Flow
Free Cash Flow	608.71M	290.84M	-108.59M	-225.50M	-213.38M	-92.32M
Operating Cash Flow	788.03M	450.14M	12.18M	-113.80M	-193.13M	-71.30M
Investing Cash Flow	-1.17B	-1.33B	-1.65B	-2.03B	-1.02B	-253.07M
Financing Cash Flow	510.13M	913.15M	1.35B	2.00B	2.58B	294.73M

Affirm Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 77.59
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 77.59 is above the 20-day moving average (MA) of 75.42, above the 50-day MA of 70.11, and above the 200-day MA of 60.41, indicating a bullish trend. The MACD of 2.41 indicates Positive momentum. The RSI at 57.89 is Neutral, neither overbought nor oversold. The STOCH value of 71.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AFRM.

Affirm Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAYO	78 Outperform	$2.44B	25.67	13.86%	―	13.02%	-2.57%
DLO	77 Outperform	$4.17B	35.08	26.10%	―	14.70%	-18.45%
FOUR	73 Outperform	$7.91B	33.15	19.00%	―	23.86%	79.35%
TOST	72 Outperform	$25.58B	127.97	14.51%	―	26.11%	―
Sector *	61 Neutral	$35.62B	7.50	-10.94%	1.87%	8.86%	-10.27%
AFRM	61 Neutral	$25.15B	―	-2.26%	―	42.54%	91.01%
MQ	61 Neutral	$2.80B	56.63	-6.51%	―	17.47%	-544.72%

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.