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Affirm (AFRM) to Post Q1 Earnings: Here's What to Expect
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Affirm Holdings, Inc. (AFRM - Free Report) is set to report its first-quarter fiscal 2023 results on Nov 8, after the closing bell.
In the last reported quarter, this leading payment network’s adjusted loss per share of 65 cents missed the Zacks Consensus Estimate by 44.4%, primarily due to increased operating costs. This was partially offset by higher transactions, servicing income and merchant growth.
The Zacks Consensus Estimate for first-quarter fiscal 2023 loss per share of 82 cents suggests a 105% plunge from the prior-year loss of 40 cents. The estimate remained stable over the past week. The consensus estimate for first-quarter fiscal 2023 revenues of $360.7 million indicates a 33.9% 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 12.4%. This is depicted in the graph below.
Higher consumer spending in the September quarter is expected to have benefited the payment solution provider. Travel and entertainment-related spendings are likely to have increased in the quarter under review. This, in turn, is likely to have augmented the strength of active merchants and consumers.
The sales figures from the merchant and the virtual card networks are likely to have risen. The Zacks Consensus Estimate for merchant network revenues is pegged at $115.6 million, indicating an increase from $92.2 million a year ago.
The consensus mark for virtual card network revenues indicates a 59.2% year-over-year rise. The Zacks Consensus Estimate for interest income in the fiscal first quarter is pegged at $144.5 million, indicating a jump from the previous fiscal-year quarter’s $117.3 million.
The consensus mark for servicing income indicates a 103% year-over-year rise. These are likely to have positioned the company for year-over-year growth in the fiscal first-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, are likely to 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 currently has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate currently stands at a loss of 82 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 September quarter: Mastercard Incorporated (MA - Free Report) , Visa Inc. (V - Free Report) and The Western Union Company (WU - Free Report) .
Mastercard reported third-quarter 2022 adjusted earnings of $2.68 per share, beating the Zacks Consensus Estimate by 4.3%. The quarterly results were driven by improved consumer spending, recovery in cross-border travel, higher gross dollar volume and increased switched transactions. However, the upside was partly offset by Mastercard’s rising operating expenses.
Visa reported fiscal fourth-quarter 2022 earnings of $1.93 per share, which outpaced the Zacks Consensus Estimate of $1.86. The quarterly results were aided by continued growth in payments volume, cross-border volume and processed transactions. However, Visa’s elevated operating costs partly offset the upside.
Western Union reported third-quarter 2022 earnings per share of 42 cents, which met the Zacks Consensus Estimate. WU’s earnings gained momentum from inflation in Argentina and reduced share count.
Image: Bigstock
Affirm (AFRM) to Post Q1 Earnings: Here's What to Expect
Affirm Holdings, Inc. (AFRM - Free Report) is set to report its first-quarter fiscal 2023 results on Nov 8, after the closing bell.
In the last reported quarter, this leading payment network’s adjusted loss per share of 65 cents missed the Zacks Consensus Estimate by 44.4%, primarily due to increased operating costs. This was partially offset by higher transactions, servicing income and merchant growth.
Let’s see how things have improved prior to the first-quarter fiscal 2023 earnings announcement.
The Trend in Estimate Revision
The Zacks Consensus Estimate for first-quarter fiscal 2023 loss per share of 82 cents suggests a 105% plunge from the prior-year loss of 40 cents. The estimate remained stable over the past week. The consensus estimate for first-quarter fiscal 2023 revenues of $360.7 million indicates a 33.9% 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 12.4%. 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
Higher consumer spending in the September quarter is expected to have benefited the payment solution provider. Travel and entertainment-related spendings are likely to have increased in the quarter under review. This, in turn, is likely to have augmented the strength of active merchants and consumers.
The sales figures from the merchant and the virtual card networks are likely to have risen. The Zacks Consensus Estimate for merchant network revenues is pegged at $115.6 million, indicating an increase from $92.2 million a year ago.
The consensus mark for virtual card network revenues indicates a 59.2% year-over-year rise. The Zacks Consensus Estimate for interest income in the fiscal first quarter is pegged at $144.5 million, indicating a jump from the previous fiscal-year quarter’s $117.3 million.
The consensus mark for servicing income indicates a 103% year-over-year rise. These are likely to have positioned the company for year-over-year growth in the fiscal first-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, are likely to 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 currently has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate currently stands at a loss of 82 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 September quarter: Mastercard Incorporated (MA - Free Report) , Visa Inc. (V - Free Report) and The Western Union Company (WU - Free Report) .
Mastercard reported third-quarter 2022 adjusted earnings of $2.68 per share, beating the Zacks Consensus Estimate by 4.3%. The quarterly results were driven by improved consumer spending, recovery in cross-border travel, higher gross dollar volume and increased switched transactions. However, the upside was partly offset by Mastercard’s rising operating expenses.
Visa reported fiscal fourth-quarter 2022 earnings of $1.93 per share, which outpaced the Zacks Consensus Estimate of $1.86. The quarterly results were aided by continued growth in payments volume, cross-border volume and processed transactions. However, Visa’s elevated operating costs partly offset the upside.
Western Union reported third-quarter 2022 earnings per share of 42 cents, which met the Zacks Consensus Estimate. WU’s earnings gained momentum from inflation in Argentina and reduced share count.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.