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Affirm Holdings, a Zacks Rank #1 (Strong Buy), is a financial technology company specializing in payment solutions that provide consumers with flexible, transparent installment loans. By partnering with a diverse range of merchants, Affirm enables customers to pay for purchases over time.
The stock is displaying relative strength and has been making a series of higher highs. The price movement is a sign of strength as we head into the second half of the year. Increasing volume has attracted investor attention as buying pressure accumulates in this top-ranked stock.
Affirm is part of the Zacks Financial Transaction Services industry group, which currently ranks in the top 31% out of more than 250 industries. Because this group is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months, just as it has over the past few months:
Image Source: Zacks Investment Research
Note the favorable metrics for this industry group below:
Image Source: Zacks Investment Research
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top industries, we can dramatically improve our stock-picking success.
Company Description
Affirm Holdings operates a payment network in the United States, Canada, and internationally. Its platform includes point-of-sale payment solutions for consumers and merchants along with a consumer-focused app.
The company boasts over 300,000 active merchants covering small businesses, large enterprises, direct-to-consumer brands, and brick-and-mortar stores. Its tools help merchants to boost sales and enhance customer engagement.
Affirm’s top-line momentum remains strong, supported by rising adoption of Affirm Cards and entry into high-growth verticals like gaming. A robust merchant network is fueling expansion with new alliances across travel, healthcare, and international markets.
Partnerships with Adyen and Shopify are aiding European growth. Affirm’s cloud-native platform uses machine learning and AI to optimize underwriting, improve efficiency and automate customer service.
Earnings Trends and Future Estimates
Affirm (AFRM - Free Report) has built up an impressive reporting history, surpassing earnings estimates in each of the past four quarters. The company delivered a trailing four-quarter average surprise of 102%.
Back in May, Affirm reported fiscal third-quarter earnings of 1 cent per share, which marked a 111% surprise over the -$0.09/share consensus estimate. Higher transactions and robust repeat customer engagement also boosted performance.
For the company’s fiscal fourth quarter, analysts are expecting Affirm to deliver year-over-year EPS growth of 164% (9 cents per share) on nearly 27% higher revenues ($835 million). Affirm is scheduled to deliver the quarterly results in late August.
Looking further out, analysts remain bullish on the stock and have raised fiscal 2026 earnings estimates by 5.71% in the past 60 days. The Zacks Consensus Estimate now stands at 74 cents per share, reflecting staggering growth of 2,355% relative to the prior year.
Image Source: Zacks Investment Research
Let’s Get Technical
This market leader has seen its stock advance more than 80% off the April lows. Only stocks that are in extremely powerful uptrends are able to experience this type of outperformance. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Image Source: StockCharts
Notice how the stock is trading above its 50-day (blue line) and 200-day (red line) moving averages, with both lines sloping up. The stock has been making a series of higher highs over the past few months. With both strong fundamental and technical indicators, AFRM stock is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Affirm has recently witnessed positive revisions. As long as this trend remains intact (and AFRM continues to deliver earnings beats), the stock will likely continue its bullish run.
Bottom Line
Backed by a leading industry group and history of earnings beats, it’s not difficult to see why AFRM stock is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix.
Affirm has achieved strong revenue growth through diverse income streams including merchant network fees, interest from loans, and virtual card revenues. Advanced machine learning and predictive models power the company’s cloud-based, data-driven platform.
Recent positive earnings estimate revisions should also serve to create a ‘floor’ in terms of any sudden or unexpected downside moves. If you haven’t already done so, be sure to put AFRM on your shortlist.
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Bull of the Day: Affirm Holdings (AFRM)
Affirm Holdings, a Zacks Rank #1 (Strong Buy), is a financial technology company specializing in payment solutions that provide consumers with flexible, transparent installment loans. By partnering with a diverse range of merchants, Affirm enables customers to pay for purchases over time.
The stock is displaying relative strength and has been making a series of higher highs. The price movement is a sign of strength as we head into the second half of the year. Increasing volume has attracted investor attention as buying pressure accumulates in this top-ranked stock.
Affirm is part of the Zacks Financial Transaction Services industry group, which currently ranks in the top 31% out of more than 250 industries. Because this group is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months, just as it has over the past few months:
Image Source: Zacks Investment Research
Note the favorable metrics for this industry group below:
Image Source: Zacks Investment Research
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top industries, we can dramatically improve our stock-picking success.
Company Description
Affirm Holdings operates a payment network in the United States, Canada, and internationally. Its platform includes point-of-sale payment solutions for consumers and merchants along with a consumer-focused app.
The company boasts over 300,000 active merchants covering small businesses, large enterprises, direct-to-consumer brands, and brick-and-mortar stores. Its tools help merchants to boost sales and enhance customer engagement.
Affirm’s top-line momentum remains strong, supported by rising adoption of Affirm Cards and entry into high-growth verticals like gaming. A robust merchant network is fueling expansion with new alliances across travel, healthcare, and international markets.
Partnerships with Adyen and Shopify are aiding European growth. Affirm’s cloud-native platform uses machine learning and AI to optimize underwriting, improve efficiency and automate customer service.
Earnings Trends and Future Estimates
Affirm (AFRM - Free Report) has built up an impressive reporting history, surpassing earnings estimates in each of the past four quarters. The company delivered a trailing four-quarter average surprise of 102%.
Back in May, Affirm reported fiscal third-quarter earnings of 1 cent per share, which marked a 111% surprise over the -$0.09/share consensus estimate. Higher transactions and robust repeat customer engagement also boosted performance.
For the company’s fiscal fourth quarter, analysts are expecting Affirm to deliver year-over-year EPS growth of 164% (9 cents per share) on nearly 27% higher revenues ($835 million). Affirm is scheduled to deliver the quarterly results in late August.
Looking further out, analysts remain bullish on the stock and have raised fiscal 2026 earnings estimates by 5.71% in the past 60 days. The Zacks Consensus Estimate now stands at 74 cents per share, reflecting staggering growth of 2,355% relative to the prior year.
Image Source: Zacks Investment Research
Let’s Get Technical
This market leader has seen its stock advance more than 80% off the April lows. Only stocks that are in extremely powerful uptrends are able to experience this type of outperformance. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Image Source: StockCharts
Notice how the stock is trading above its 50-day (blue line) and 200-day (red line) moving averages, with both lines sloping up. The stock has been making a series of higher highs over the past few months. With both strong fundamental and technical indicators, AFRM stock is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Affirm has recently witnessed positive revisions. As long as this trend remains intact (and AFRM continues to deliver earnings beats), the stock will likely continue its bullish run.
Bottom Line
Backed by a leading industry group and history of earnings beats, it’s not difficult to see why AFRM stock is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix.
Affirm has achieved strong revenue growth through diverse income streams including merchant network fees, interest from loans, and virtual card revenues. Advanced machine learning and predictive models power the company’s cloud-based, data-driven platform.
Recent positive earnings estimate revisions should also serve to create a ‘floor’ in terms of any sudden or unexpected downside moves. If you haven’t already done so, be sure to put AFRM on your shortlist.