Weakness led to opportunity.
Look at Affirm Holdings (AFRM), for example.
On October 25, we noted, “Keep an eye on Affirm Holdings (AFRM). A good deal of the downside is an overreaction on news that doesn’t even impact it.”
At the time, AFRM traded at $16.64. Today, it’s now back up to $49.43 and still running.
All thanks to buy now, pay later momentum and earnings. In its most recent quarter, the company did post an EPS loss of 57 cents, but it beat by 13 cents. Revenue of $497 million, up 37.4% year over year also beat expectations by $52.53 million. Helping, the holiday shopping spree was fueled by the buy now, pay later option offered by companies like AFRM.
Even better, Affirm’s BNPL will now be offered at 4,500 Walmart self-checkout lanes. “Expanding our partnership with Walmart and bringing Affirm’s transparent monthly pay-over-time options to their self-checkout kiosks in the U.S. will help even more consumers increase their purchasing power during the holiday shopping season and beyond,” Pat Suh, Affirm’s senior vice president of revenue, said in the news release.
Analysts at Barclays just raised their price target on AFRM to $50 from $41, with an overweight rating. Mizuho analysts also raised their price target to $65 from $30, with a buy rating.
As noted by TheFly.com, “Mizuho expects the debate around Affirm to increasingly shift from BNPL and partnerships like Walmart (WMT) to Affirm becoming a full-fledged financial services firm. In that context, Mizuho contends that the combination of rapid adoption of the Affirm Card coupled with an estimated three to four times uplift in card spend for users with direct deposit could drive a step-function increase to our medium-term expectations.”
From here, we’d like to see it test $60.
