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Affirm (AFRM) to Post Q4 Earnings: Here's What to Expect
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Affirm Holdings, Inc. (AFRM - Free Report) is set to report fourth-quarter fiscal 2022 results on Aug 25, after the closing bell.
In the last reported quarter, this leading payment network’s adjusted loss per share of 19 cents was narrower than the Zacks Consensus Estimate of a loss of 45 cents, primarily due to higher servicing and interest incomes. Merchant network revenues witnessed massive year-over-year growth. This was partially offset by escalating operating costs.
The Zacks Consensus Estimate for fourth-quarter fiscal 2022 loss per share of 45 cents suggests a 6.3% improvement from the prior-year loss of 48 cents. The estimate remained stable over the past week. The consensus estimate for fourth-quarter fiscal 2022 revenues of $354.8 million indicates a 35.5% increase from the year-ago reported figure.
Affirm beat on earnings in one of the trailing four quarters and missed thrice, the average negative surprise being 20.7%. This is depicted in the graph below.
The payment solution provider is expected to have gained from higher consumer spending in the June quarter. Overall economic recovery aided consumer spending growth, courtesy of the relaxation of COVID-related restrictions and travel bans. This, in turn, is likely to have augmented the strength of active merchants and consumers.
The sales figures from the merchant network and the virtual card network are likely to have risen. The Zacks Consensus Estimate for merchant network revenues is pegged at $121.8 million, indicating growth from $88.7 million a year ago.
The consensus mark for virtual card network revenues indicates a 46.2% year-over-year rise. The Zacks Consensus Estimate for interest income in the fiscal fourth quarter is pegged at $142.8 million, indicating a jump from the previous fiscal-year quarter’s $103.8 million.
The consensus mark for servicing income indicates a 135.4% year-over-year rise. These might have positioned the company for year-over-year growth in fiscal fourth-quarter results. However, rising operating costs are likely to have increased in the quarter under review, affecting the bottom line. Higher processing and servicing costs, as a result of increased volumes, might have boosted the operating expenses, making an earnings beat uncertain.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Affirm this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company’s Earnings ESP is 0.00%. This is because the Most Accurate Estimate currently stands at a loss of 45 cents per share, in line with the Zacks Consensus Estimate.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Affirm currently carries a Zacks Rank #3.
Here are some companies from the Business Services space that have already reported earnings for the June quarter. These include Mastercard Incorporated (MA - Free Report) , Visa Inc. (V - Free Report) and The Western Union Company (WU - Free Report) .
Mastercard reported second-quarter 2022 adjusted earnings of $2.56 per share, which beat the Zacks Consensus Estimate by 8.5%. The quarterly results were driven by improved consumer spending, solid cross-border volume growth, higher gross dollar volume (GDV) and increased switched transactions.
Visa reported fiscal third-quarter 2022 earnings of $1.98 per share, which outpaced the Zacks Consensus Estimate by 13.8%. The quarterly results were aided by continued growth in payments volume, cross-border volume and processed transactions.
Western Union reported second-quarter 2022 earnings per share of 51 cents, which outpaced the Zacks Consensus Estimate by 24.4%. WU’s earnings gained momentum from an improved operating margin and reduced share count.
Image: Bigstock
Affirm (AFRM) to Post Q4 Earnings: Here's What to Expect
Affirm Holdings, Inc. (AFRM - Free Report) is set to report fourth-quarter fiscal 2022 results on Aug 25, after the closing bell.
In the last reported quarter, this leading payment network’s adjusted loss per share of 19 cents was narrower than the Zacks Consensus Estimate of a loss of 45 cents, primarily due to higher servicing and interest incomes. Merchant network revenues witnessed massive year-over-year growth. This was partially offset by escalating operating costs.
Let’s see how things have improved prior to the fourth-quarter fiscal 2022 earnings announcement.
The Trend in Estimate Revision
The Zacks Consensus Estimate for fourth-quarter fiscal 2022 loss per share of 45 cents suggests a 6.3% improvement from the prior-year loss of 48 cents. The estimate remained stable over the past week. The consensus estimate for fourth-quarter fiscal 2022 revenues of $354.8 million indicates a 35.5% increase from the year-ago reported figure.
Affirm beat on earnings in one of the trailing four quarters and missed thrice, the average negative surprise being 20.7%. This is depicted in the graph below.
Affirm Holdings, Inc. Price and EPS Surprise
Affirm Holdings, Inc. price-eps-surprise | Affirm Holdings, Inc. Quote
Factors to Note
The payment solution provider is expected to have gained from higher consumer spending in the June quarter. Overall economic recovery aided consumer spending growth, courtesy of the relaxation of COVID-related restrictions and travel bans. This, in turn, is likely to have augmented the strength of active merchants and consumers.
The sales figures from the merchant network and the virtual card network are likely to have risen. The Zacks Consensus Estimate for merchant network revenues is pegged at $121.8 million, indicating growth from $88.7 million a year ago.
The consensus mark for virtual card network revenues indicates a 46.2% year-over-year rise. The Zacks Consensus Estimate for interest income in the fiscal fourth quarter is pegged at $142.8 million, indicating a jump from the previous fiscal-year quarter’s $103.8 million.
The consensus mark for servicing income indicates a 135.4% year-over-year rise. These might have positioned the company for year-over-year growth in fiscal fourth-quarter results. However, rising operating costs are likely to have increased in the quarter under review, affecting the bottom line. Higher processing and servicing costs, as a result of increased volumes, might have boosted the operating expenses, making an earnings beat uncertain.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Affirm this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company’s Earnings ESP is 0.00%. This is because the Most Accurate Estimate currently stands at a loss of 45 cents per share, in line with the Zacks Consensus Estimate.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Affirm currently carries a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
How Other Stocks Performed
Here are some companies from the Business Services space that have already reported earnings for the June quarter. These include Mastercard Incorporated (MA - Free Report) , Visa Inc. (V - Free Report) and The Western Union Company (WU - Free Report) .
Mastercard reported second-quarter 2022 adjusted earnings of $2.56 per share, which beat the Zacks Consensus Estimate by 8.5%. The quarterly results were driven by improved consumer spending, solid cross-border volume growth, higher gross dollar volume (GDV) and increased switched transactions.
Visa reported fiscal third-quarter 2022 earnings of $1.98 per share, which outpaced the Zacks Consensus Estimate by 13.8%. The quarterly results were aided by continued growth in payments volume, cross-border volume and processed transactions.
Western Union reported second-quarter 2022 earnings per share of 51 cents, which outpaced the Zacks Consensus Estimate by 24.4%. WU’s earnings gained momentum from an improved operating margin and reduced share count.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.