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Affirm Holdings
(NASDAQ:AFRM)
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Rating:72Outperform
Price Target:
$86.00
▲(33.33% Upside)
Action:Reiterated
Date:06/26/26
AFRM scores well on improving fundamentals—especially the step-change to positive margins and strong free cash flow—supported by constructive technical momentum and a bullish earnings-call backdrop (better funding costs and accelerating merchant/engagement metrics). The main offset is valuation, with a high P/E and no dividend yield, alongside the TTM revenue decline that increases execution risk.
Positive Factors
Improved cash generation and profitability
Affirm has moved from multi-year negative cash flow to sustained positive operating and free cash flow, with FCF representing ~78% of net income. Durable cash generation reduces reliance on external funding, funds product investment, supports underwriting reserves, and materially raises financial resilience over the medium term.
Negative Factors
TTM revenue contraction
A nearly 14% TTM revenue decline raises questions about top‑line durability despite margin improvement. Persistent revenue weakness can limit operating leverage, slow merchant and card presentment growth, and make sustaining recent profitability harder if volume and engagement trends stall over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved cash generation and profitability
Affirm has moved from multi-year negative cash flow to sustained positive operating and free cash flow, with FCF representing ~78% of net income. Durable cash generation reduces reliance on external funding, funds product investment, supports underwriting reserves, and materially raises financial resilience over the medium term.
Read all positive factors
Affirm Holdings Key Performance Indicators (KPIs)
Any
Active Consumers
Tracks the number of unique users who have made a purchase using Affirm, reflecting customer engagement and growth potential.
Tracks the number of unique users who have made a purchase using Affirm, reflecting customer engagement and growth potential.
Data provided by:
The Fly
The FlyAffirm Holdings (AFRM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$26.62B
Dividend YieldN/A
Average Volume (3M)5.24M
Price to Earnings (P/E)71.1
Beta (1Y)2.66
Revenue Growth32.33%
EPS GrowthN/A
CountryUS
Employees2,006
SectorFinancial
Sector Strength70
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)1.15
Shares Outstanding294,357,800
10 Day Avg. Volume4,592,211
30 Day Avg. Volume5,244,894
Financial Highlights & Ratios
PEG Ratio-3.94
Price to Book (P/B)7.27
Price to Sales (P/S)6.92
P/FCF Ratio37.10
Enterprise Value/Market Cap1.13
Enterprise Value/Revenue7.59
Enterprise Value/Gross Profit11.20
Enterprise Value/Ebitda26.98
Forecast
1Y Price Target
$86.09Price Target Upside33.47% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering25
EPS Forecast (FY)1.79
Revenue Forecast (FY)$5.26B
Affirm Holdings Business Overview & Revenue Model
Company Description
Affirm Holdings, Inc. provides a digital and mobile-first commerce platform that operates across the United States and Canada. This platform offers consumers a point-of-sale financing solution, delivers various tools for merchants, and includes a ...
How the Company Makes Money
Affirm primarily makes money by facilitating installment-payment transactions between consumers and merchants and by funding or arranging the funding of those consumer loans. Key revenue streams include: (1) Merchant network revenue: fees paid by ...
Affirm Holdings Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Aug 20, 2026
Earnings Call Sentiment Positive
The call had a decisively positive tone: management reported record performance, strong funding markets with improving funding costs (~125 bps YoY), accelerated merchant growth (+44% active merchants), robust Card momentum (multi‑million cardholder base and billions in volume), and rising engagement metrics (transactions per active >20%). Credit performance was described as stable with elevated prepayments as a constructive signal. Manageable lowlights include a sequential uptick in allowance (seasonal and mix-driven), the lower RLTC profile of merchant-funded 0% offers, a modest near-term comp headwind, and small incremental AI/tooling costs. Overall, the positive operational and capital-market developments substantially outweigh these limited near-term challenges.Positive Updates
Record Quarter and Strong Tone from Management
Management described fiscal Q3 as "another one for the record books," signaling broad confidence in results and execution across products and operations.
Negative Updates
Allowance Rate Up Quarter-over-Quarter
The allowance was higher sequentially in Q3. Management attributed this to seasonality (Q3 typically elevated after holiday Q2) and elevated prepayments reducing loan balances, which can mechanically raise allowance as a percentage of receivables.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Quarter and Strong Tone from Management
Management described fiscal Q3 as "another one for the record books," signaling broad confidence in results and execution across products and operations.
Read all positive updates
Company Guidance
Management said it is incrementally more positive on fiscal Q4 growth in the updated guide and highlighted several key metrics: active merchant count is up 44% YoY; transactions per active are growing >20%; the Affirm Card base is roughly 60% toward the long‑term target of 7.5M active card users and $10B GMV; Pay‑in‑X is the fastest‑growing segment (helped by a large program moving to an evergreen 0% Pay‑in‑4 and continued Shopify growth); funding execution included three deals YTD (two revolving priced in the quarter and one static priced but not closed), with significant oversubscription and tightening spreads that contributed to funding costs being down about 125 bps YoY; RLTC margins remain above long‑term targets; the allowance rate was higher QoQ mostly due to seasonality and elevated prepayments from tax season; and incremental AI/developer tooling costs are low single‑digit millions per quarter but are expected to boost productivity.Affirm Holdings Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
68
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.97B | 3.22B | 2.32B | 1.59B | 1.35B | 870.46M |
| Gross Profit | 2.69B | 2.18B | 1.48B | 714.82M | 772.84M | 547.55M |
| EBITDA | 1.12B | 711.99M | -2.23M | -671.60M | -602.41M | -370.69M |
| Net Income | 382.42M | 52.19M | -517.76M | -985.35M | -707.42M | -441.03M |
Balance Sheet | ||||||
| Total Assets | 13.14B | 11.15B | 9.52B | 8.16B | 6.97B | 4.87B |
| Cash, Cash Equivalents and Short-Term Investments | 2.97B | 2.23B | 2.14B | 2.07B | 2.85B | 1.48B |
| Total Debt | 8.91B | 7.85B | 6.61B | 5.45B | 4.14B | 1.98B |
| Total Liabilities | 9.36B | 8.09B | 6.79B | 5.62B | 4.36B | 2.29B |
| Stockholders Equity | 3.78B | 3.07B | 2.73B | 2.53B | 2.62B | 2.58B |
Cash Flow | ||||||
| Free Cash Flow | 787.11M | 601.72M | 290.84M | -108.59M | -273.90M | -213.38M |
| Operating Cash Flow | 1.01B | 793.91M | 450.14M | 12.18M | -162.19M | -193.13M |
| Investing Cash Flow | -1.81B | -1.08B | -1.33B | -1.65B | -2.01B | -1.02B |
| Financing Cash Flow | 1.53B | 751.42M | 913.15M | 1.35B | 2.04B | 2.58B |
Affirm Holdings Technical Analysis
Positive
64.50
Price Trends
67.73
Positive
58.83
Positive
66.39
Positive
Market Momentum
2.92
Negative
64.46
Neutral
86.62
Negative
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 64.5 is below the 20-day moving average (MA) of 70.57, below the 50-day MA of 67.73, and below the 200-day MA of 66.39, indicating a bullish trend. The MACD of 2.92 indicates Negative momentum. The RSI at 64.46 is Neutral, neither overbought nor oversold. The STOCH value of 86.62 is Negative, 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 1 New Risks
1.
We are subject to both natural and man-made events that may unexpectedly disrupt our operations and adversely impact our business. Q2, 2023
Affirm Holdings Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $2.41B | 35.24 | 10.01% | ― | 7.19% | -36.03% | |
76 Outperform | $46.32B | 59.96 | 3.64% | ― | 2.27% | -69.08% | |
72 Outperform | $26.62B | 71.12 | 11.17% | ― | 32.33% | ― | |
68 Neutral | $1.77B | 746.43 | 0.27% | ― | 23.39% | -94.62% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
62 Neutral | $12.06B | -37.96 | -8.16% | ― | 33.05% | -199.10% | |
57 Neutral | $3.78B | 53.80 | 6.42% | ― | 28.28% | -72.43% |
* Financial Sector Average
AFRM
Affirm Holdings
81.79
12.65
18.30%
XYZ
Block
78.02
10.09
14.85%
FOUR
Shift4 Payments
48.23
-50.88
-51.34%
PAYO
Payoneer
7.09
0.24
3.50%
MQ
Marqeta
4.18
-1.65
-28.30%
KLAR
Klarna Group Plc
20.24
-22.50
-52.64%
Affirm Holdings Corporate Events
Executive/Board ChangesPrivate Placements and Financing
Affirm Holdings Expands Board With New Independent Director
Positive
Jun 25, 2026
On June 18, 2026, Affirm Holdings, Inc. and its subsidiary Affirm, Inc. amended their revolving credit agreement, increasing the unsecured facility from $330 million to $675 million and extending its maturity to June 18, 2029, subject to earlier t...
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.