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AFRM vs. AXP: Which Fintech Play is the Better Bet for 2026?
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Key Takeaways
AFRM posted 33.6% revenue growth, rising active users and 96% repeat transactions in fiscal Q1 2026.
Affirm's real-time underwriting and expanding partners are improving operating leverage.
AXP's revenues increased 11%, but its mature model limits upside versus faster-scaling fintech platforms.
Affirm Holdings, Inc. (AFRM - Free Report) and American Express Company (AXP - Free Report) operate in different corners of the payments ecosystem, but both sit squarely at the intersection of consumer spending and credit. As payment preferences evolve and financing models shift, investors are increasingly comparing traditional card-based giants with newer, embedded-finance disruptors.
Affirm represents the modern buy now, pay later (BNPL) model, integrating directly into digital checkout experiences, while American Express remains anchored to its premium cardholder and lending-driven ecosystem. With consumer behavior continuing to evolve and interest-rate expectations stabilizing into 2026, the contrast between these models is worth exploring now.
The key question for investors is whether Affirm’s growth-led, platform-style approach offers more upside than AmEx’s scale and stability. Let’s dive deep and closely compare the fundamentals of the two stocks to determine which one has more upside now.
The Case for Affirm
Affirm has positioned itself as a pure-play beneficiary of the BNPL trend, which continues to gain traction across e-commerce, travel and everyday spending categories. In its last reported quarter, Affirm’s revenues witnessed 33.6% year-over-year growth, driven by higher gross merchandise volume and deeper merchant penetration. Active consumers climbed to 24.1 million, while transactions per user continue to rise. Fiscal first-quarter 2026 transactions revealed 96% repeat usage, signaling improving engagement.
What differentiates Affirm from traditional lenders like AmEx is its technology-first underwriting model. Affirm uses real-time data and machine learning to assess credit risk at the point of sale, allowing it to approve transactions more precisely while managing losses. This has helped stabilize credit performance even as the company expands into shorter-duration, higher-frequency loans, a key lever for improving margins over time.Early success with the cash-flow underwriting method is boosting its Affirm Card adoption.
Affirm’s growing merchant ecosystem, with 420,000 partners, is another major strength. Partnerships with Shopify, Amazon, Costco and Apple embed Affirm directly into checkout flows, making it a default financing option. This embedded nature gives Affirm control over the consumer experience in a way that card networks cannot easily replicate. International expansion through Shopify, particularly in parts of Europe, further extends its long-term growth runway heading into 2026.
Risks remain. Affirm carries higher leverage and remains sensitive to funding conditions and competition from rivals such as Klarna Group plc (KLAR - Free Report) . Its long-term debt-to-capital ratio of 70.6% exceeds American Express’s 64.1%, reflecting its growth-stage profile. The loss of Walmart to Klarna as a BNPL partner also highlighted competitive pressures.
However, Affirm has steadily diversified its funding sources through securitizations and bank partnerships, reducing reliance on any single channel. While profitability is still developing, operating leverage is improving as revenue scales faster than fixed costs. a dynamic that could meaningfully reshape earnings power over the coming quarters.
The Case for American Express
American Express remains a best-in-class operator within traditional payments, benefiting from a loyal, high-spending customer base and strong brand equity. In its latest reported quarter, AmEx delivered 11% revenue growth, supported by resilient travel and entertainment spending and continued growth in card fees and interest income. Its premium positioning and affluent customer mix have historically insulated it from softer spending cycles.
However, that same model introduces constraints when compared with Affirm’s growth profile. AmEx’s revenue mix is heavily tied to lending and interest income, but it is less agile in capitalizing on emerging non-card-based payment technologies. While delinquency trends remain manageable, provisions for credit losses have trended higher in the last few years, reflecting a more cautious consumer environment.
Growth for American Express is also more incremental. The company already has deep penetration in core markets, and while efforts to attract younger customers are progressing, expansion is naturally slower. Unlike Affirm, which is still scaling its ecosystem, AmEx operates at scale, making outsized growth more difficult without assuming additional credit risk or diluting its premium positioning.
Innovation at AmEx tends to be measured rather than disruptive. The company continues to invest in digital tools, rewards and merchant acceptance, but its closed-loop structure lacks the flexibility of Affirm’s software-led, embedded finance platform. As payments increasingly move toward alternative credit models and seamless checkout integrations, AmEx’s card-centric approach may limit upside relative to faster-moving fintech peers.
How Do Zacks Estimates Compare for AFRM & AXP?
The Zacks Consensus Estimate suggests sharper earnings momentum for Affirm. The consensus mark for AFRM’s fiscal 2026 earnings indicates 560% year-over-year surge, followed by 56.8% growth next year. It beat earnings estimates in each of the past four quarters with an average of 129.3%.
Affirm Holdings, Inc. Price, Consensus and EPS Surprise
The consensus estimate for AXP’s 2025 earnings signals 15.4% increase from a year ago, followed by 13.9% growth next year. It also beat earnings estimates in each of the past four quarters, but with an average surprise of 4%.
American Express Company Price, Consensus and EPS Surprise
Affirm trades at a higher price-to-sales multiple, reflecting its growth profile, while AmEx’s lower multiple mirrors its maturity. AFRM is currently trading at 5.58X forward P/S, above AXP’s 3.33X.
Image Source: Zacks Investment Research
Price Performance Comparison
Affirm has significantly outperformed AmEx over the past month, driven by renewed investor appetite for growth-oriented fintech names. During this time, AFRM has jumped 14%, AXP has increased 5.8%, and both beat the S&P 500’s 1.7% increase.
1-Month Price Performance - AFRM, AXP & S&P 500
Image Source: Zacks Investment Research
Conclusion
While American Express offers stability and dependable cash flows, Affirm stands out as the more compelling upside play for 2026. Its rapid revenue growth, expanding merchant ecosystem, improving operating leverage, and alignment with evolving consumer payment behavior position it for stronger long-term gains.
For investors willing to tolerate near-term volatility in exchange for higher growth potential, Affirm offers a more compelling risk-reward profile now, even as the stocks currently carry a Zacks Rank #3 (Hold) each.
Image: Bigstock
AFRM vs. AXP: Which Fintech Play is the Better Bet for 2026?
Key Takeaways
Affirm Holdings, Inc. (AFRM - Free Report) and American Express Company (AXP - Free Report) operate in different corners of the payments ecosystem, but both sit squarely at the intersection of consumer spending and credit. As payment preferences evolve and financing models shift, investors are increasingly comparing traditional card-based giants with newer, embedded-finance disruptors.
Affirm represents the modern buy now, pay later (BNPL) model, integrating directly into digital checkout experiences, while American Express remains anchored to its premium cardholder and lending-driven ecosystem. With consumer behavior continuing to evolve and interest-rate expectations stabilizing into 2026, the contrast between these models is worth exploring now.
The key question for investors is whether Affirm’s growth-led, platform-style approach offers more upside than AmEx’s scale and stability. Let’s dive deep and closely compare the fundamentals of the two stocks to determine which one has more upside now.
The Case for Affirm
Affirm has positioned itself as a pure-play beneficiary of the BNPL trend, which continues to gain traction across e-commerce, travel and everyday spending categories. In its last reported quarter, Affirm’s revenues witnessed 33.6% year-over-year growth, driven by higher gross merchandise volume and deeper merchant penetration. Active consumers climbed to 24.1 million, while transactions per user continue to rise. Fiscal first-quarter 2026 transactions revealed 96% repeat usage, signaling improving engagement.
What differentiates Affirm from traditional lenders like AmEx is its technology-first underwriting model. Affirm uses real-time data and machine learning to assess credit risk at the point of sale, allowing it to approve transactions more precisely while managing losses. This has helped stabilize credit performance even as the company expands into shorter-duration, higher-frequency loans, a key lever for improving margins over time.Early success with the cash-flow underwriting method is boosting its Affirm Card adoption.
Affirm’s growing merchant ecosystem, with 420,000 partners, is another major strength. Partnerships with Shopify, Amazon, Costco and Apple embed Affirm directly into checkout flows, making it a default financing option. This embedded nature gives Affirm control over the consumer experience in a way that card networks cannot easily replicate. International expansion through Shopify, particularly in parts of Europe, further extends its long-term growth runway heading into 2026.
Risks remain. Affirm carries higher leverage and remains sensitive to funding conditions and competition from rivals such as Klarna Group plc (KLAR - Free Report) . Its long-term debt-to-capital ratio of 70.6% exceeds American Express’s 64.1%, reflecting its growth-stage profile. The loss of Walmart to Klarna as a BNPL partner also highlighted competitive pressures.
However, Affirm has steadily diversified its funding sources through securitizations and bank partnerships, reducing reliance on any single channel. While profitability is still developing, operating leverage is improving as revenue scales faster than fixed costs. a dynamic that could meaningfully reshape earnings power over the coming quarters.
The Case for American Express
American Express remains a best-in-class operator within traditional payments, benefiting from a loyal, high-spending customer base and strong brand equity. In its latest reported quarter, AmEx delivered 11% revenue growth, supported by resilient travel and entertainment spending and continued growth in card fees and interest income. Its premium positioning and affluent customer mix have historically insulated it from softer spending cycles.
However, that same model introduces constraints when compared with Affirm’s growth profile. AmEx’s revenue mix is heavily tied to lending and interest income, but it is less agile in capitalizing on emerging non-card-based payment technologies. While delinquency trends remain manageable, provisions for credit losses have trended higher in the last few years, reflecting a more cautious consumer environment.
Growth for American Express is also more incremental. The company already has deep penetration in core markets, and while efforts to attract younger customers are progressing, expansion is naturally slower. Unlike Affirm, which is still scaling its ecosystem, AmEx operates at scale, making outsized growth more difficult without assuming additional credit risk or diluting its premium positioning.
Innovation at AmEx tends to be measured rather than disruptive. The company continues to invest in digital tools, rewards and merchant acceptance, but its closed-loop structure lacks the flexibility of Affirm’s software-led, embedded finance platform. As payments increasingly move toward alternative credit models and seamless checkout integrations, AmEx’s card-centric approach may limit upside relative to faster-moving fintech peers.
How Do Zacks Estimates Compare for AFRM & AXP?
The Zacks Consensus Estimate suggests sharper earnings momentum for Affirm. The consensus mark for AFRM’s fiscal 2026 earnings indicates 560% year-over-year surge, followed by 56.8% growth next year. It beat earnings estimates in each of the past four quarters with an average of 129.3%.
Affirm Holdings, Inc. Price, Consensus and EPS Surprise
Affirm Holdings, Inc. price-consensus-eps-surprise-chart | Affirm Holdings, Inc. Quote
The consensus estimate for AXP’s 2025 earnings signals 15.4% increase from a year ago, followed by 13.9% growth next year. It also beat earnings estimates in each of the past four quarters, but with an average surprise of 4%.
American Express Company Price, Consensus and EPS Surprise
American Express Company price-consensus-eps-surprise-chart | American Express Company Quote
Valuation: AFRM vs. AXP
Affirm trades at a higher price-to-sales multiple, reflecting its growth profile, while AmEx’s lower multiple mirrors its maturity. AFRM is currently trading at 5.58X forward P/S, above AXP’s 3.33X.
Price Performance Comparison
Affirm has significantly outperformed AmEx over the past month, driven by renewed investor appetite for growth-oriented fintech names. During this time, AFRM has jumped 14%, AXP has increased 5.8%, and both beat the S&P 500’s 1.7% increase.
1-Month Price Performance - AFRM, AXP & S&P 500
Conclusion
While American Express offers stability and dependable cash flows, Affirm stands out as the more compelling upside play for 2026. Its rapid revenue growth, expanding merchant ecosystem, improving operating leverage, and alignment with evolving consumer payment behavior position it for stronger long-term gains.
For investors willing to tolerate near-term volatility in exchange for higher growth potential, Affirm offers a more compelling risk-reward profile now, even as the stocks currently carry a Zacks Rank #3 (Hold) each.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.