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Affirm stock has soared 76% in six months, outpacing peers and the broader market.
Earnings are projected to climb sharply through 2027, supported by margin expansion.
High repeat-customer rates and rising GMV support recurring revenue and long-term momentum.
Shares of Affirm Holdings, Inc. (AFRM - Free Report) have been on a tear, surging 76% over the past six months, handily outperforming the broader market and peers. During the same period, the industry advanced 32.2%, while the S&P 500 gained 23.1%. Affirm’s rally has eclipsed other buy now, pay later (BNPL) names such as PayPal Holdings, Inc. (PYPL - Free Report) and Block, Inc. (XYZ - Free Report) .
The strong run stems from upbeat financials, a string of strategic partnerships, bullish guidance, and continued innovation that is boosting recurring revenue streams. With such a steep climb, investors are asking: Is Affirm’s story just heating up, or is it due for a breather? Let’s dig deeper.
Price Performance – AFRM, PYPL, XYZ, Industry & S&P 500
Image Source: Zacks Investment Research
Favorable Earnings Estimates for AFRM
Analysts remain optimistic about Affirm’s trajectory. The Zacks Consensus Estimate for Affirm’s fiscal 2026 earnings is pegged at 84 cents per share, a dramatic leap from 15 cents a year ago. Looking further ahead, fiscal 2027 earnings are expected to climb another 72% year over year. Top-line projections are also strong, with fiscal 2026 and 2027 expected growth rates at 23.8% and 22.5%, respectively.
Affirm expects gross merchandise volume to reach $46 billion in fiscal 2026, up from $36.7 billion the previous year. Meanwhile, its adjusted operating margin is projected to expand to 26.1% compared with 24.1% in fiscal 2025.
Affirm has beaten earnings estimates for the past four quarters, with an average surprise of 105.5%.
Affirm Holdings, Inc. Price, Consensus and EPS Surprise
Affirm is aggressively scaling beyond U.S. borders, leveraging its partnerships. Following its successful entry into the U.K., the company is preparing to expand into Western Europe, starting with France, Germany and the Netherlands, through a strategic tie-up with Shopify. It also intends to relaunch in Australia. With access to over 377,000 merchants, these expansions could open lucrative new growth corridors.
Beyond geography, Affirm is targeting new verticals. A collaboration with Xsolla positions the company to penetrate the fast-growing gaming segment, capturing younger, digital-first consumers. This diversification strengthens its presence beyond core retail and travel sectors. Affirm is also expanding its product suite. Alongside BNPL, it is investing in debit-based solutions and business-to-business payment tools, paving the way for a broader financial ecosystem.
One of its most promising tailwinds is the extended partnership with Apple Pay, which will boost in-store BNPL adoption. Meanwhile, the latest collaboration with Google could reshape Affirm’s digital footprint, embedding its services into AI-driven and cross-platform purchase experiences. As agent-led commerce gains traction, this integration will likely be a game-changer for AFRM’s visibility and growth.
AFRM’s Valuation
Investors are clearly pricing in Affirm’s strong growth profile and expanding market share. It is trading at 5.62X forward 12-month sales, slightly above the industry average of 5.46X, yet notably higher than its three-year median of 3.85X. By comparison, PayPal and Block trade at 1.90X and 1.73X forward sales, respectively.
Image Source: Zacks Investment Research
Focus on Repeat Customers
Affirm’s strength lies in customer loyalty. In the fiscal fourth quarter, a striking 95% of transactions came from returning users, underscoring brand trust and predictable recurring revenue. The company’s emphasis on smaller, high-frequency purchases is building steadier cash flow and deepening engagement.
Demand for 0% APR installment plans has been explosive, soaring 93% year over year in the fiscal fourth quarter and representing 14% of total GMV. Overall, total transactions jumped 45.6% year over year to 31.3 million, highlighting sustained user activity and platform stickiness.
By offering transparent payment terms and reducing cart abandonment rates for merchants, Affirm continues to reinforce its value proposition for both shoppers and partners, which is a vital competitive edge in an increasingly crowded BNPL field.
AFRM’s Key Risks to Watch
As of fiscal 2025-end, Affirm carried a long-term debt of $7.8 billion. Although it is still a growing company, its long-term debt-to-capital ratio of 71.8% is significantly higher than the industry average of 13.7%, which remains a concern. It needs to deliver consistent profitability in the coming quarters to strengthen investor confidence in its ability to manage and service its obligations.
Competition, too, remains fierce. Walmart’s switch from Affirm to Klarna Group plc (KLAR - Free Report) highlights the fragility of merchant relationships in the BNPL space. Beyond Klarna, Affirm faces mounting pressure from PayPal, Block, and traditional banks and credit card companies that are introducing their own installment-payment offerings.
Conclusion
Affirm’s growth story remains compelling as it continues to pair rapid financial improvement with expanding global partnerships and a loyal user base. The company’s ability to drive recurring revenue through repeat transactions, strengthen margins and diversify across verticals like gaming and debit solutions showcases solid execution. While its elevated debt load and competitive pressures pose risks, Affirm’s growing scale, brand trust and integration with platforms like Apple Pay and Google support long-term momentum. Backed by strong earnings projections, Affirm currently carries a Zacks Rank #2 (Buy), reflecting significant upside potential. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Affirm Stock Jumps 76% in 6 Months: Buy Now, Thank Yourself Later?
Key Takeaways
Shares of Affirm Holdings, Inc. (AFRM - Free Report) have been on a tear, surging 76% over the past six months, handily outperforming the broader market and peers. During the same period, the industry advanced 32.2%, while the S&P 500 gained 23.1%. Affirm’s rally has eclipsed other buy now, pay later (BNPL) names such as PayPal Holdings, Inc. (PYPL - Free Report) and Block, Inc. (XYZ - Free Report) .
The strong run stems from upbeat financials, a string of strategic partnerships, bullish guidance, and continued innovation that is boosting recurring revenue streams. With such a steep climb, investors are asking: Is Affirm’s story just heating up, or is it due for a breather? Let’s dig deeper.
Price Performance – AFRM, PYPL, XYZ, Industry & S&P 500
Image Source: Zacks Investment Research
Favorable Earnings Estimates for AFRM
Analysts remain optimistic about Affirm’s trajectory. The Zacks Consensus Estimate for Affirm’s fiscal 2026 earnings is pegged at 84 cents per share, a dramatic leap from 15 cents a year ago. Looking further ahead, fiscal 2027 earnings are expected to climb another 72% year over year. Top-line projections are also strong, with fiscal 2026 and 2027 expected growth rates at 23.8% and 22.5%, respectively.
Affirm expects gross merchandise volume to reach $46 billion in fiscal 2026, up from $36.7 billion the previous year. Meanwhile, its adjusted operating margin is projected to expand to 26.1% compared with 24.1% in fiscal 2025.
Affirm has beaten earnings estimates for the past four quarters, with an average surprise of 105.5%.
Affirm Holdings, Inc. Price, Consensus and EPS Surprise
Affirm Holdings, Inc. price-consensus-eps-surprise-chart | Affirm Holdings, Inc. Quote
Focus on Expansion
Affirm is aggressively scaling beyond U.S. borders, leveraging its partnerships. Following its successful entry into the U.K., the company is preparing to expand into Western Europe, starting with France, Germany and the Netherlands, through a strategic tie-up with Shopify. It also intends to relaunch in Australia. With access to over 377,000 merchants, these expansions could open lucrative new growth corridors.
Beyond geography, Affirm is targeting new verticals. A collaboration with Xsolla positions the company to penetrate the fast-growing gaming segment, capturing younger, digital-first consumers. This diversification strengthens its presence beyond core retail and travel sectors. Affirm is also expanding its product suite. Alongside BNPL, it is investing in debit-based solutions and business-to-business payment tools, paving the way for a broader financial ecosystem.
One of its most promising tailwinds is the extended partnership with Apple Pay, which will boost in-store BNPL adoption. Meanwhile, the latest collaboration with Google could reshape Affirm’s digital footprint, embedding its services into AI-driven and cross-platform purchase experiences. As agent-led commerce gains traction, this integration will likely be a game-changer for AFRM’s visibility and growth.
AFRM’s Valuation
Investors are clearly pricing in Affirm’s strong growth profile and expanding market share. It is trading at 5.62X forward 12-month sales, slightly above the industry average of 5.46X, yet notably higher than its three-year median of 3.85X. By comparison, PayPal and Block trade at 1.90X and 1.73X forward sales, respectively.
Image Source: Zacks Investment Research
Focus on Repeat Customers
Affirm’s strength lies in customer loyalty. In the fiscal fourth quarter, a striking 95% of transactions came from returning users, underscoring brand trust and predictable recurring revenue. The company’s emphasis on smaller, high-frequency purchases is building steadier cash flow and deepening engagement.
Demand for 0% APR installment plans has been explosive, soaring 93% year over year in the fiscal fourth quarter and representing 14% of total GMV. Overall, total transactions jumped 45.6% year over year to 31.3 million, highlighting sustained user activity and platform stickiness.
By offering transparent payment terms and reducing cart abandonment rates for merchants, Affirm continues to reinforce its value proposition for both shoppers and partners, which is a vital competitive edge in an increasingly crowded BNPL field.
AFRM’s Key Risks to Watch
As of fiscal 2025-end, Affirm carried a long-term debt of $7.8 billion. Although it is still a growing company, its long-term debt-to-capital ratio of 71.8% is significantly higher than the industry average of 13.7%, which remains a concern. It needs to deliver consistent profitability in the coming quarters to strengthen investor confidence in its ability to manage and service its obligations.
Competition, too, remains fierce. Walmart’s switch from Affirm to Klarna Group plc (KLAR - Free Report) highlights the fragility of merchant relationships in the BNPL space. Beyond Klarna, Affirm faces mounting pressure from PayPal, Block, and traditional banks and credit card companies that are introducing their own installment-payment offerings.
Conclusion
Affirm’s growth story remains compelling as it continues to pair rapid financial improvement with expanding global partnerships and a loyal user base. The company’s ability to drive recurring revenue through repeat transactions, strengthen margins and diversify across verticals like gaming and debit solutions showcases solid execution. While its elevated debt load and competitive pressures pose risks, Affirm’s growing scale, brand trust and integration with platforms like Apple Pay and Google support long-term momentum. Backed by strong earnings projections, Affirm currently carries a Zacks Rank #2 (Buy), reflecting significant upside potential. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.