Bull of the Day: Affirm Holdings Inc. (AFRM)

Affirm Holdings (AFRM) is a Zack Rank #1 (Strong Buy) that is a financial services company that offers "buy now, pay later" solutions, allowing customers to make purchases and pay over time.The company provides flexible payment plans, including interest-free options, across various merchants.The stock was flying high just a couple months ago, but the recent market sell off has brought AFRM down to 6-month lows. This sell-off looks like a great opportunity for long-term investors to get exposure to the fintech space.About the CompanyAffirm was founded in 2012 and is headquartered in San Francisco, California. The stock is valued at $12 billion, and the company employs 2,000.The company provides flexible payment solutions through its platform, which includes a consumer-facing app, merchant commerce tools, and point-of-sale financing. Backed by partnerships with banks, Affirm enables customers to buy now and pay over time, without hidden fees or compounding interest.Affirm's services power transactions for a diverse range of merchants, from small businesses to large enterprises, across sectors including travel, fashion, home goods, sporting equipment, electronics, and general retail.The stock has a Zacks Style Score of “B” in Growth and “A” in Momentum. However, AFRM has an “F” score in Value.Q2 Earnings BeatThe company last reported earnings back in February posting an EPS beat of 215%. With that. The company beat on revenues and raised guidance.Q3 revenues are now seen at $755-785M, above the $773M expected. FY25 revenues were taken up to $3.13-3.19B v the $3.11B expected.Active Merchants were 337.2K v the 323K last quarter while Active Consumers were 21M v the 19.5M last quarter.Affirm’s management highlighted a record-breaking holiday season, with standout growth across key categories like third-party marketplaces (up 44%) and travel (up 42%), and a 113% year-over-year jump in Affirm Card GMV. A major driver was 70% growth in 0% APR GMV. The company is nearing profitability ahead of its target, citing strong operating leverage, resilient unit economics, and confidence in navigating high-rate environments. Leadership emphasized Affirm’s competitive edge in credit performance, merchant trust, and consumer experience.Estimates Headed HigherThe company has seen analyst estimates go higher across most time frames.For the current quarter, estimates have gone from -$0.15 to -$0.07 over the last 90 days. Next quarter, the move has stayed flat over the last 90 days, with analysts seeing $0.09.  For the current year, estimates have jumped from $-0.55 to -$0.10 since that earnings report. And for next year, estimates have gone from $0.50 to $0.61. This is a move of 18% over the last 90 days.Affirm Holdings, Inc. Price and Consensus Affirm Holdings, Inc. price-consensus-chart | Affirm Holdings, Inc. QuoteSince earnings, there have been a handful of firms reiterating their buy ratings:BMO Capital Markets resumed AFRM with Outperform, with a price target of $69.Goldman Sachs reiterated AFRM with Buy with a price target of $56.TD Cowen initiates AFRM with Buy and a price target of $50.  The Technical TakeAFRM started the year strong, moving from $50-80 in the first six weeks. However, the stock has seen a violent correction with the recent market weakness.The stock looks to have bottomed around the $30 area and is starting to bounce. There seems to be more meat on the bone here with the moving averages significant above current trading levels.Let’s take a look at some potential resistance:21-day: $46.00200-day: $48.2550-day: $57.20Fibonacci resistance: $62While the stock might find a hard time lifting with the ongoing market weakness. Investors should keep an eye on these levels for profit taking.  In SummaryAffirm is showing strong momentum as it nears profitability, backed by robust revenue growth, expanding user and merchant bases, and increasing analyst confidence.With a record-setting holiday quarter, raised guidance, and improving estimates, the company is proving its ability to thrive even in a higher-rate environment.While the stock has pulled back from its early-year highs, the recent bounce and positive technical setup suggest further upside potential. For investors seeking growth and momentum in the fintech space, AFRM is a name worth watching closely.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Affirm Holdings, Inc. (AFRM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks