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Affirm (AFRM) to Offer Varied Payment Options in Gift Card Space
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Affirm Holdings, Inc. (AFRM - Free Report) recently collaborated with the renowned digital gift card distributor of the United States, Blackhawk Network (“BHN”), in a bid to offer a varied array of transparent and flexible payment options for purchasing gift cards.
An easy financing process awaits consumers inclined to buy digital gift cards, thanks to AFRM’s solution. One needs to apply for a loan on the Affirm platform, which is followed by immediate approval. Consequent to this, consumers can choose from a list of tailored repayment plans with annual percentage rates (“APR”) that start at 0% for eligible purchases. A 0% APR loan implies no interest payments by consumers, which seems lucrative.
Consumers have a clear understanding of their total purchase cost and are not required to pay anything more at the time of checkout, even if they miss out or are late on payments. Therefore, with greater peace of mind, they can purchase digital gift cards from entertainment, dining, clothing, accessories, outdoor goods, home and other varied brands directly on the official website of Affirm or in its app.
The recent partnership is likely to pave the way for the entry of Affirm’s payment solutions in a new market of digital gift cards, whose growth rate is more than double that of physical gift cards (per BHN management). The reach of AFRM’s network will inevitably receive a boost as a result of the recent move since BHN daily witnesses more than 300 million shoppers across the globe.
Such partnerships imply an opportunity for Affirm to boost fees from merchants in return for higher sales generated through the usage of financing products. AFRM generally earns a greater amount of merchant fees on 0% APR financing products. Also, the flexibility to buy now and make installment payments later does not strain the finances of a consumer, thereby substantiating the widespread adoption of AFRM’s financing product suite.
The decision to roll out its financing options across the gift card market seems to be a time-opportune move amid the ongoing holiday season. According to a recent Affirm survey, 70% of Americans may purchase a gift card during this holiday season. There are several reports of Black Friday sales hitting a record mark of $9.8 billion (according to Adobe Analytics), out of which $79 million of online sales took place with the help of buy-now-pay-later (BNPL) options. This bodes well for BNPL financing solution providers like Affirm.
This November, one of the tech giants, Amazon (AMZN - Free Report) , chose Affirm to be the first pay-over-time option available at the checkout point of its business-to-business store, Amazon Business. AFRM also joined forces with Booking.com in September 2023 to provide flexible payment options to consumers in travel bookings.
Shares of Affirm have surged 67.3% in the past three months compared with the industry’s 2.2% growth. AFRM currently carries a Zacks Rank #2 (Buy).
The bottom line of FirstCash outpaced estimates in each of the last four quarters, the average surprise being 7.86%. The Zacks Consensus Estimate for FCFS’s 2023 earnings suggests an improvement of 13.1% from the year-ago reported figure. The consensus mark for revenues suggests growth of 15.8% from the prior-year figure. The consensus mark for FCFS’s 2023 earnings has moved 5.2% north in the past 60 days.
Huron Consulting’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 25.69%. The Zacks Consensus Estimate for HURN’s 2023 earnings suggests an improvement of 38.8% from the year-ago reported figure. The consensus mark for revenues suggests growth of 20.5% from the prior-year reading. The consensus mark for HURN’s 2023 earnings has moved 5.3% north in the past 60 days.
Shares of FirstCash and Huron Consulting have gained 19.8% and 5.3%, respectively, in the past three months.
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Affirm (AFRM) to Offer Varied Payment Options in Gift Card Space
Affirm Holdings, Inc. (AFRM - Free Report) recently collaborated with the renowned digital gift card distributor of the United States, Blackhawk Network (“BHN”), in a bid to offer a varied array of transparent and flexible payment options for purchasing gift cards.
An easy financing process awaits consumers inclined to buy digital gift cards, thanks to AFRM’s solution. One needs to apply for a loan on the Affirm platform, which is followed by immediate approval. Consequent to this, consumers can choose from a list of tailored repayment plans with annual percentage rates (“APR”) that start at 0% for eligible purchases. A 0% APR loan implies no interest payments by consumers, which seems lucrative.
Consumers have a clear understanding of their total purchase cost and are not required to pay anything more at the time of checkout, even if they miss out or are late on payments. Therefore, with greater peace of mind, they can purchase digital gift cards from entertainment, dining, clothing, accessories, outdoor goods, home and other varied brands directly on the official website of Affirm or in its app.
The recent partnership is likely to pave the way for the entry of Affirm’s payment solutions in a new market of digital gift cards, whose growth rate is more than double that of physical gift cards (per BHN management). The reach of AFRM’s network will inevitably receive a boost as a result of the recent move since BHN daily witnesses more than 300 million shoppers across the globe.
Such partnerships imply an opportunity for Affirm to boost fees from merchants in return for higher sales generated through the usage of financing products. AFRM generally earns a greater amount of merchant fees on 0% APR financing products. Also, the flexibility to buy now and make installment payments later does not strain the finances of a consumer, thereby substantiating the widespread adoption of AFRM’s financing product suite.
The decision to roll out its financing options across the gift card market seems to be a time-opportune move amid the ongoing holiday season. According to a recent Affirm survey, 70% of Americans may purchase a gift card during this holiday season. There are several reports of Black Friday sales hitting a record mark of $9.8 billion (according to Adobe Analytics), out of which $79 million of online sales took place with the help of buy-now-pay-later (BNPL) options. This bodes well for BNPL financing solution providers like Affirm.
This November, one of the tech giants, Amazon (AMZN - Free Report) , chose Affirm to be the first pay-over-time option available at the checkout point of its business-to-business store, Amazon Business. AFRM also joined forces with Booking.com in September 2023 to provide flexible payment options to consumers in travel bookings.
Shares of Affirm have surged 67.3% in the past three months compared with the industry’s 2.2% growth. AFRM currently carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks in the Business Services space are FirstCash Holdings, Inc. (FCFS - Free Report) and Huron Consulting Group Inc. (HURN - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of FirstCash outpaced estimates in each of the last four quarters, the average surprise being 7.86%. The Zacks Consensus Estimate for FCFS’s 2023 earnings suggests an improvement of 13.1% from the year-ago reported figure. The consensus mark for revenues suggests growth of 15.8% from the prior-year figure. The consensus mark for FCFS’s 2023 earnings has moved 5.2% north in the past 60 days.
Huron Consulting’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 25.69%. The Zacks Consensus Estimate for HURN’s 2023 earnings suggests an improvement of 38.8% from the year-ago reported figure. The consensus mark for revenues suggests growth of 20.5% from the prior-year reading. The consensus mark for HURN’s 2023 earnings has moved 5.3% north in the past 60 days.
Shares of FirstCash and Huron Consulting have gained 19.8% and 5.3%, respectively, in the past three months.