We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why You Should Add Affirm (AFRM) Stock to Your Portfolio Now
Read MoreHide Full Article
Affirm Holdings, Inc. (AFRM - Free Report) is well poised for growth with strong Gross Merchandise Volume (“GMV”) growth potential, an expanding buy now, pay later (BNPL) landscape and rising active merchant numbers. Additionally, its growing transaction volumes and interest income present a compelling investment opportunity.
Affirm — with a market cap of almost $9.1 billion — is a platform for digital and mobile-first commerce that offers financial products. Now, let’s take a look at its recent price performance to gauge investor sentiment toward the stock.
Investor confidence is pretty high now as the stock has experienced an impressive 85.2% surge in the past year against the industry’s decline of 7.9%.
Image Source: Zacks Investment Research
Due to its solid prospects, this currently Zacks Rank #2 (Buy) stock presents an attractive investment opportunity for investors at the moment. Also, it currently has a VGM Score of B, where V stands for Value, G stands for Growth and M stands for Momentum. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AFRM’s current-year earnings indicates a 40.7% year-over-year improvement. The stock has witnessed five upward estimate revisions in the past 30 days against none in the opposite direction. Affirm beat on earnings in two of the last four quarters and missed twice.
The consensus mark for current-year revenues is pegged at nearly $2.3 billion, suggesting a 42.6% rise from the prior year’s reported number. The expected growth will be supported by increasing GMV and transaction volumes. Affirm forecasts fourth-quarter fiscal 2024 GMV to be in the range of $6.75-$6.95 billion alone. Further, with its expanding operations GMV will continue to rise. The company has set a goal to achieve $50 billion in GMV in the medium term.
The company is looking for opportunities beyond U.S. retail to fuel its growth. It is expected to leverage its partners’ penetration rate in the U.K. and other significant markets in Europe to further boost its GMV, thereby improving its revenue. By leveraging its partners' penetration in high-growth markets, the company can achieve substantial returns without the need for additional partnerships, at least initially.
Affirm continues to reap the rewards of a high interest rate environment, which is boosting its interest income. Additionally, potential interest rate cuts from the Fed can increase Affirm’s BNPL loan volumes in the future.
Key Risks
However, there are a few factors that investors should keep an eye on. Increasing competition in the BNPL space can work as a headwind for the company. Also, higher funding costs due to high interest rates and limited consumer loan demand in the secondary market may affect its growth. Nevertheless, we believe that a systematic and strategic plan of action will drive AFRM’s performance in the long term.
Other Key Picks
Investors interested in the broader Business Services space can look at some other top-ranked stocks like Global Payments Inc. (GPN - Free Report) , Paysafe Limited (PSFE - Free Report) and WEX Inc. (WEX - Free Report) , each carrying a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Global Payments’ 2024 earnings is currently pegged at $11.63 per share, indicating 11.6% year-over-year growth. It beat estimates in each of the past four quarters with an average surprise of 1.1%. The consensus mark for GPN’s revenues of $9.2 billion suggests a 6.4% increase from the year-ago level.
The Zacks Consensus Estimate for Paysafe’s current-year earnings is now pegged at $2.47 per share, indicating 6% year-over-year growth. It beat earnings estimates thrice in the past four quarters and missed once, with an average surprise of 18.3%. The consensus mark for PSFE’s revenues of $1.7 billion suggests a 6.5% increase from the year-ago level.
The Zacks Consensus Estimate for WEX’s 2024 earnings of $16.26 per share suggests 9.8% year-over-year growth. It beat earnings estimates thrice in the past four quarters and missed once, with an average surprise of 3.3%. The consensus estimate for WEX’s current year revenues is pegged at $2.7 billion, indicating a 7.6% increase from a year ago.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why You Should Add Affirm (AFRM) Stock to Your Portfolio Now
Affirm Holdings, Inc. (AFRM - Free Report) is well poised for growth with strong Gross Merchandise Volume (“GMV”) growth potential, an expanding buy now, pay later (BNPL) landscape and rising active merchant numbers. Additionally, its growing transaction volumes and interest income present a compelling investment opportunity.
Affirm — with a market cap of almost $9.1 billion — is a platform for digital and mobile-first commerce that offers financial products. Now, let’s take a look at its recent price performance to gauge investor sentiment toward the stock.
Investor confidence is pretty high now as the stock has experienced an impressive 85.2% surge in the past year against the industry’s decline of 7.9%.
Image Source: Zacks Investment Research
Due to its solid prospects, this currently Zacks Rank #2 (Buy) stock presents an attractive investment opportunity for investors at the moment. Also, it currently has a VGM Score of B, where V stands for Value, G stands for Growth and M stands for Momentum. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AFRM’s current-year earnings indicates a 40.7% year-over-year improvement. The stock has witnessed five upward estimate revisions in the past 30 days against none in the opposite direction. Affirm beat on earnings in two of the last four quarters and missed twice.
The consensus mark for current-year revenues is pegged at nearly $2.3 billion, suggesting a 42.6% rise from the prior year’s reported number. The expected growth will be supported by increasing GMV and transaction volumes. Affirm forecasts fourth-quarter fiscal 2024 GMV to be in the range of $6.75-$6.95 billion alone. Further, with its expanding operations GMV will continue to rise. The company has set a goal to achieve $50 billion in GMV in the medium term.
The company is looking for opportunities beyond U.S. retail to fuel its growth. It is expected to leverage its partners’ penetration rate in the U.K. and other significant markets in Europe to further boost its GMV, thereby improving its revenue. By leveraging its partners' penetration in high-growth markets, the company can achieve substantial returns without the need for additional partnerships, at least initially.
Affirm continues to reap the rewards of a high interest rate environment, which is boosting its interest income. Additionally, potential interest rate cuts from the Fed can increase Affirm’s BNPL loan volumes in the future.
Key Risks
However, there are a few factors that investors should keep an eye on. Increasing competition in the BNPL space can work as a headwind for the company. Also, higher funding costs due to high interest rates and limited consumer loan demand in the secondary market may affect its growth. Nevertheless, we believe that a systematic and strategic plan of action will drive AFRM’s performance in the long term.
Other Key Picks
Investors interested in the broader Business Services space can look at some other top-ranked stocks like Global Payments Inc. (GPN - Free Report) , Paysafe Limited (PSFE - Free Report) and WEX Inc. (WEX - Free Report) , each carrying a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Global Payments’ 2024 earnings is currently pegged at $11.63 per share, indicating 11.6% year-over-year growth. It beat estimates in each of the past four quarters with an average surprise of 1.1%. The consensus mark for GPN’s revenues of $9.2 billion suggests a 6.4% increase from the year-ago level.
The Zacks Consensus Estimate for Paysafe’s current-year earnings is now pegged at $2.47 per share, indicating 6% year-over-year growth. It beat earnings estimates thrice in the past four quarters and missed once, with an average surprise of 18.3%. The consensus mark for PSFE’s revenues of $1.7 billion suggests a 6.5% increase from the year-ago level.
The Zacks Consensus Estimate for WEX’s 2024 earnings of $16.26 per share suggests 9.8% year-over-year growth. It beat earnings estimates thrice in the past four quarters and missed once, with an average surprise of 3.3%. The consensus estimate for WEX’s current year revenues is pegged at $2.7 billion, indicating a 7.6% increase from a year ago.