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Affirm Stock Moves Above 200-Day SMA: Time to Buy the Bounce?
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Key Takeaways
AFRM has surged past its 200-day SMA, signaling a potential uptrend amid rising investor momentum.
A 94% repeat user rate, 0% APR growth and new verticals are driving Affirm's BNPL expansion.
Global rollout via Shopify and a valuation discount position AFRM for potential upside despite debt concerns.
Shares of Affirm Holdings, Inc. (AFRM - Free Report) are gaining momentum, buoyed by product innovation, a growing customer base, and strategic moves in the buy now, pay later (BNPL) space. Recently, AFRM has broken above its 200-day simple moving average (SMA), a key technical level often seen as the start of a potential uptrend. The stock closed at $54.33 yesterday, still trading at a 34.2% discount from its 52-week high of $82.53, suggesting ample room for upside.
The 200-day SMA is a widely followed technical indicator used to assess long-term trends. When a stock moves above this line, it often signals improving sentiment and potential support for future gains.
Affirm Price Movement vs. 200-Day Moving Average
Image Source: Zacks Investment Research
AFRM’s Price Performance: A Mixed Bag
Over the past month, AFRM has risen 6.5%, slightly ahead of the S&P 500’s 6.3% gain but trailing the industry’s 13.7% climb. During this time, major BNPL service provider PayPal Holdings, Inc. (PYPL - Free Report) grew 7% while Block, Inc. (XYZ - Free Report) jumped 35%.
Price Performance – AFRM, PYPL, XYZ, Industry & S&P 500
Image Source: Zacks Investment Research
What’s Working for AFRM
Repeat customer growth is emerging as a major strength for Affirm. In the fiscal third quarter, 94% of transactions came from returning users, a strong indicator of brand loyalty and the potential for more stable, recurring revenues.
Affirm is also broadening its reach by moving into everyday consumer categories such as home goods and lifestyle. A recent partnership with World Market highlights this strategic shift toward more consistent, day-to-day usage.
On the global front, Affirm is expanding beyond North America. After entering the U.K. market, the company now plans to roll out services across Western Europe, starting with France, Germany and the Netherlands, through a partnership with Shopify. Backed by a network of over 358,000 merchant partners, this international expansion could unlock significant new growth opportunities.
AFRM Shares Trading at a Discount
Affirm is relatively undervalued compared to peers. Its 4.51X forward 12-month sales is lower than the industry average of 5.56X. Meanwhile, PayPal and Block are currently trading at 2.10X and 1.51X, respectively.
Image Source: Zacks Investment Research
AFRM’s Growth Drivers Remain Intact
The company’s model benefits both merchants and consumers. By reducing cart abandonment and offering flexible, transparent payment options — including 0% APR monthly installments — Affirm drives sales for partners while building a strong user base. Notably, 0% APR plans rose 44% year over year in the fiscal third quarter and accounted for 13% of GMV.
In addition to its BNPL offerings, Affirm is investing in complementary financial products, including debit solutions and business-to-business tools. These innovations can drive more frequent usage, deepen customer relationships and strengthen its merchant ecosystem.
Favorable Earnings Estimates for AFRM
The Zacks Consensus Estimate for Affirm’s fiscal 2025 earnings suggests a 100.6% year-over-year improvement to a penny per share, while fiscal 2026 earnings are expected to soar to 70 cents. Revenue projections are also strong, with fiscal 2025 and 2026 expected to grow 37% and 23.7%, respectively. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The company anticipates fiscal fourth quarter revenues between $815-$845 million and Gross Merchandise Value between $9.4-$9.7 billion. It has delivered solid financial results lately, beating earnings estimates in each of the trailing four quarters, the average surprise being 102.2%.
As of March 31, 2025, Affirm had $1.9 billion in funding debt. Although it is a growing company, its long-term debt-to-capital ratio stands at 71.8%, far above the industry average of 13.3%, which remains a concern. It needs to demonstrate sustained profitability over the coming quarters to assure investors about its capacity to service debt obligations.
Operating expenses have been rising steadily, up 76.6% in fiscal 2022, 25.9% in fiscal 2023, and 5.4% in fiscal 2024. In the fiscal third quarter alone, they increased 7.4%. As Affirm continues to invest in growth and innovation, cost management will be critical to protecting margins.
The BNPL space is increasingly crowded. Rivals like PayPal, Klarna and Block, as well as traditional banks and credit card companies, are all expanding their offerings. Walmart’s recent decision to switch from Affirm to Klarna illustrates the intensity of the competitive landscape and may signal challenges to its merchant retention efforts.
How to Play Affirm Shares Now?
Affirm’s recent breakout above its 200-day SMA is a promising technical signal, backed by improving fundamentals, loyal customer behavior, and expansion into new markets and product categories. The company continues to innovate and grow its revenue base while trading at a relative valuation discount. However, high debt levels, rising expenses and intensifying competition in the BNPL space present notable risks.
Given the mix of strong growth drivers and ongoing risks, Affirm currently carries a Zacks Rank #3 (Hold), suggesting investors may want to wait for clearer signs of sustainable profitability before making moves. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Affirm Stock Moves Above 200-Day SMA: Time to Buy the Bounce?
Key Takeaways
Shares of Affirm Holdings, Inc. (AFRM - Free Report) are gaining momentum, buoyed by product innovation, a growing customer base, and strategic moves in the buy now, pay later (BNPL) space. Recently, AFRM has broken above its 200-day simple moving average (SMA), a key technical level often seen as the start of a potential uptrend. The stock closed at $54.33 yesterday, still trading at a 34.2% discount from its 52-week high of $82.53, suggesting ample room for upside.
The 200-day SMA is a widely followed technical indicator used to assess long-term trends. When a stock moves above this line, it often signals improving sentiment and potential support for future gains.
Affirm Price Movement vs. 200-Day Moving Average
AFRM’s Price Performance: A Mixed Bag
Over the past month, AFRM has risen 6.5%, slightly ahead of the S&P 500’s 6.3% gain but trailing the industry’s 13.7% climb. During this time, major BNPL service provider PayPal Holdings, Inc. (PYPL - Free Report) grew 7% while Block, Inc. (XYZ - Free Report) jumped 35%.
Price Performance – AFRM, PYPL, XYZ, Industry & S&P 500
What’s Working for AFRM
Repeat customer growth is emerging as a major strength for Affirm. In the fiscal third quarter, 94% of transactions came from returning users, a strong indicator of brand loyalty and the potential for more stable, recurring revenues.
Affirm is also broadening its reach by moving into everyday consumer categories such as home goods and lifestyle. A recent partnership with World Market highlights this strategic shift toward more consistent, day-to-day usage.
On the global front, Affirm is expanding beyond North America. After entering the U.K. market, the company now plans to roll out services across Western Europe, starting with France, Germany and the Netherlands, through a partnership with Shopify. Backed by a network of over 358,000 merchant partners, this international expansion could unlock significant new growth opportunities.
AFRM Shares Trading at a Discount
Affirm is relatively undervalued compared to peers. Its 4.51X forward 12-month sales is lower than the industry average of 5.56X. Meanwhile, PayPal and Block are currently trading at 2.10X and 1.51X, respectively.
AFRM’s Growth Drivers Remain Intact
The company’s model benefits both merchants and consumers. By reducing cart abandonment and offering flexible, transparent payment options — including 0% APR monthly installments — Affirm drives sales for partners while building a strong user base. Notably, 0% APR plans rose 44% year over year in the fiscal third quarter and accounted for 13% of GMV.
In addition to its BNPL offerings, Affirm is investing in complementary financial products, including debit solutions and business-to-business tools. These innovations can drive more frequent usage, deepen customer relationships and strengthen its merchant ecosystem.
Favorable Earnings Estimates for AFRM
The Zacks Consensus Estimate for Affirm’s fiscal 2025 earnings suggests a 100.6% year-over-year improvement to a penny per share, while fiscal 2026 earnings are expected to soar to 70 cents. Revenue projections are also strong, with fiscal 2025 and 2026 expected to grow 37% and 23.7%, respectively. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The company anticipates fiscal fourth quarter revenues between $815-$845 million and Gross Merchandise Value between $9.4-$9.7 billion. It has delivered solid financial results lately, beating earnings estimates in each of the trailing four quarters, the average surprise being 102.2%.
Affirm Holdings, Inc. Price and EPS Surprise
Affirm Holdings, Inc. price-eps-surprise | Affirm Holdings, Inc. Quote
AFRM’s Headwinds to Monitor
As of March 31, 2025, Affirm had $1.9 billion in funding debt. Although it is a growing company, its long-term debt-to-capital ratio stands at 71.8%, far above the industry average of 13.3%, which remains a concern. It needs to demonstrate sustained profitability over the coming quarters to assure investors about its capacity to service debt obligations.
Operating expenses have been rising steadily, up 76.6% in fiscal 2022, 25.9% in fiscal 2023, and 5.4% in fiscal 2024. In the fiscal third quarter alone, they increased 7.4%. As Affirm continues to invest in growth and innovation, cost management will be critical to protecting margins.
The BNPL space is increasingly crowded. Rivals like PayPal, Klarna and Block, as well as traditional banks and credit card companies, are all expanding their offerings. Walmart’s recent decision to switch from Affirm to Klarna illustrates the intensity of the competitive landscape and may signal challenges to its merchant retention efforts.
How to Play Affirm Shares Now?
Affirm’s recent breakout above its 200-day SMA is a promising technical signal, backed by improving fundamentals, loyal customer behavior, and expansion into new markets and product categories. The company continues to innovate and grow its revenue base while trading at a relative valuation discount. However, high debt levels, rising expenses and intensifying competition in the BNPL space present notable risks.
Given the mix of strong growth drivers and ongoing risks, Affirm currently carries a Zacks Rank #3 (Hold), suggesting investors may want to wait for clearer signs of sustainable profitability before making moves. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.