Affirm Holdings, Inc. (NASDAQ: AFRM) is a US-based fintech company founded in 2012. The company is renowned for its buy-now-pay-later solution in in-person and online stores. Its service lets customers pay over time without surprises or fees. At times, it has a 0% APR and flexible payment plans. The company offers other payment solutions to expand the customer base and grow the average order value.
Stock Performance
Affirm Holdings (AFRM) stock is worth $29.37 per share as of November 28, 2023. The stock closed 11.97% higher on the most trading session after a 16% rise during early morning trading. Its rise was attributed to a new report that shows the buy now, pay later model is rising amidst the holiday shopping season.
The stock has had a good run in 2023, having risen 222.75% year-to-date. In the past 30 days alone, FARM stock is up 71.75%.
A new report by Adobe Analytics found that BNPL purchases amounted to around $7.3 billion from November 1-November 26, 2023. That is a year-over-year rise of 14%, with the trend showing signs of acceleration after Black Friday. According to Adobe, the use of BNPL is up 20% year-over-year during the holiday weekend, accounting for $782 million in online spending.
Affirm Holdings Earnings Report
Affirm released its fiscal Q1 2024 earnings report on November 8, 2023. It reported better-than-expected numbers in most metrics. Its revenue of $497 million surpassed analysts’ estimates of $444.47 million by 11.72%. Earnings per share also beat estimates by 8.68%. Affirm reported an EPS of -$0.56 against a prediction of -$0.61.
In its outlook segment, the company expects revenue of $495 million to $520 million in Q2 2024. Additionally, it foresees a rise in demand for its financing products in Q2.
The Rise of BNPL
Affirm sells BNPL to shoppers as a short-term loan with zero interest. As US inflation has continued to rise, it has become increasingly attractive. Affirm is offered at over 250,000 retailers, including major players like Walmart, Amazon, Target, and Dick’s Sporting Goods.
A recent survey by Affirm found that 54% of customers actively seek out retailers offering BNPL during the current holiday season. The company recently revealed that it was also expanding its solution to B2B shopping. It will roll out the service in partnership with Amazon Business.
Affirm Holdings Stock Forecast
Analysts have given AFRM stock a solid hold rating. That means it is expected to perform at the same level as the stock market. They give the stock a high price target of $33 and a low of $12 for an average target of $29.37. That is a price change of -26.49% based on the current price.
Should You Buy Affirm Stock?
Affirm Holdings (AFRM) stock has had a great run this week. Its price has risen by 222.75% year-to-date. The recent robust holiday season spending has greatly impacted its price, with Black Friday shopping hitting a record $8.9 billion, partly thanks to online shopping.
That means the company will post better numbers than predicted in its outlook in the next quarter. In its most recent quarterly report, the company reported a year-over-year revenue increase of 37%, narrowing its net loss to $171 million.
Analysts have found that inflation is dropping, which could help to boost spending. Consequently, it could increase Affirm Holdings’ revenue. Additionally, slowed inflation could lower interest rates, lowering Affirm’s financing costs.
Based on the above figures, AFRM stock could beat analysts’ predictions in the long term and experience double-digit growth in 2024.
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