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American Express vs. Affirm: Which Payments Stock Has More Upside?
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Key Takeaways
American Express saw 10% spending growth in Q1 2026, driven by premium customers and travel demand.
Affirm posted 30% revenue growth and 36% GMV gains, fueled by BNPL adoption and merchant expansion.
AFRM shows higher upside with 22.7% target gap and rapid EPS growth, outpacing AXP's projections.
Consumer payments are undergoing structural shifts as digital adoption rises and alternative financing models gain traction, reshaping how transactions are funded and monetized. Traditional credit cards and buy now, pay later (BNPL) offerings are increasingly converging, competing for consumer spend while navigating evolving credit conditions, merchant economics and regulatory oversight.
American Express Company (AXP - Free Report) and Affirm Holdings, Inc. (AFRM - Free Report) operate within this overlapping landscape, each targeting transaction growth through distinct approaches. AXP relies on its closed-loop network, premium customer base and revolving credit model, whereas AFRM emphasizes installment-based lending embedded at checkout through merchant partnerships. Differences in business model, revenue composition and credit exposure define how each is positioned within the evolving consumer finance ecosystem.
Let’s dive deep and closely compare the fundamentals of the two stocks to determine which one has more upside now.
The Case for American Express
American Express continues to benefit from strong spending momentum, with card member spending rising 10% year over year in the first quarter of 2026, the fastest pace in three years. Growth was broad-based across goods & services and travel and entertainment, supported by resilient consumer demand and steady activity across both domestic and international markets.
The company’s premium positioning remains a key driver of growth. Luxury retail spending increased 18% in the quarter, reflecting resilience among higher-income consumers, while engagement with premium products continues to strengthen. The U.S. Platinum portfolio is experiencing improved spend trends following recent product refreshes, alongside consistently high retention rates even after fee increases.
Customer acquisition and mix further support long-term durability. More than 70% of new accounts are tied to fee-paying products, reinforcing a shift toward higher-value customers. At the same time, Millennial and Gen Z cohorts are contributing meaningfully to new accounts and spending growth, indicating that the premium model continues to resonate with younger demographics.
Credit performance and financial discipline further reinforce stability in the model. Delinquency and write-off rates remain below pre-pandemic levels, while revenue growth is supported by multiple streams, including fees and net interest income. In the first quarter of 2026, total revenues (net of interest expenses) increased 11% year over year, while total transactions rose 10%. The company beat earnings in three of the past four quarters and missed once, with an average surprise of 3.9%.
American Express Company Price, Consensus and EPS Surprise
American Express is advancing its growth strategy through targeted investments in product innovation, partnerships and technology. The company is expanding its premium value proposition via new commercial card offerings, enhanced expense management tools and deeper integrations across its network. Additionally, it is building out AI-driven capabilities, including agentic commerce solutions and fraud prevention tools, aimed at improving transaction security, personalization and customer experience within its closed-loop ecosystem.
However, continued investments in marketing, rewards programs and customer value propositions are central to the company’s growth strategy but may keep the expense base elevated relative to revenues. Total expenses rose 6% in 2024, 11.1% year over year in 2025 and 11% in the first quarter of 2026.
The Case for Affirm
Affirm’s growth is being driven by expanding transaction volumes and increasing platform adoption. Revenues rose 30% year over year in the second quarter of fiscal 2026, supported by higher engagement from active consumers and a steady increase in transactions per user. Merchant additions and broader acceptance are also contributing to overall volume growth. Gross Merchandise Volume improved 36% year over year in the same period.
As the platform continues to scale, its growth is becoming more diversified. Instead of relying heavily on a few large partners, a growing share of activity is now coming from a broader mix of merchants, including smaller and emerging categories. This shift toward a more distributed merchant network reflects deeper penetration across the commerce ecosystem.
The company’s core proposition is rooted in BNPL, offering transparent, installment-based financing, particularly through its 0% offerings. This continues to resonate with consumers and merchants, driving conversion rates and repeat usage. Products like the Affirm Card are emerging as meaningful growth drivers, expanding usage beyond point-of-sale financing and deepening customer engagement within the ecosystem. It beat earnings estimates in each of the past four quarters with an average of 83.5%.
Affirm Holdings, Inc. Price, Consensus and EPS Surprise
Expansion initiatives are further broadening the opportunity set. International markets, particularly the U.K., along with newer verticals like services and digital wallets, are opening additional growth avenues. Meanwhile, stable credit trends and improving funding conditions support the company’s ability to scale while maintaining control over risk.
Affirm is leveraging artificial intelligence to enhance its platform through data-driven optimization and personalization. Tools like Boost AI enable automated A/B testing of financing offers, allowing merchants to dynamically optimize conversion rates and allocate promotional spend more efficiently. AI-driven underwriting and real-time decisioning are supporting more precise risk assessment and tailored consumer financing options.
However, it continues to face a rise in total expenses. Total operating expenses rose 15.5% year over year in the second quarter, mainly due to higher funding costs, provision for credit losses, loss on loan purchase commitment and processing and servicing expenses.
How Do Estimates Compare for AXP & AFRM?
The Zacks Consensus Estimate suggests sharper earnings momentum for Affirm. The consensus estimates for AXP’s 2026 earnings indicate a 14% increase from a year ago, followed by 14.1% growth next year. Meanwhile, the consensus estimate for 2026 revenues suggests 9.2% growth.
On the other hand, the Zacks Consensus Estimate for AFRM’s fiscal 2026 EPS indicates a 620% year-over-year surge, followed by 58.7% growth next year. The consensus estimate for fiscal 2026 revenues suggests 28.5% growth.
Valuation: AXP vs. AFRM
Coming to the valuation story, Affirm trades at a higher price-to-sales multiple, reflecting its growth profile, while AXP’s lower multiple mirrors its maturity. AFRM is currently trading at 4.21X forward P/S, above AXP’s 2.70X.
Image Source: Zacks Investment Research
Price Target
AXP currently trades below its average analyst price target of $357.62, implying a 7.4% potential upside from current levels. AFRM also trades below its average analyst price target of $81.70, implying an attractive 22.7% potential upside from current levels.
Price Performance Comparison
Over the past year, shares of AFRM have outperformed AXP. Meanwhile, the S&P 500 has increased 33.2% during this time.
Price Performance – AXP, AFRM & S&P 500
Image Source: Zacks Investment Research
Conclusion
American Express reflects a more mature and stable business model, supported by its premium customer base, consistent spending trends and disciplined credit performance. In contrast, Affirm is demonstrating a faster growth profile, driven by expanding BNPL adoption, increasing merchant partnerships and strong momentum across key operating metrics.
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American Express vs. Affirm: Which Payments Stock Has More Upside?
Key Takeaways
Consumer payments are undergoing structural shifts as digital adoption rises and alternative financing models gain traction, reshaping how transactions are funded and monetized. Traditional credit cards and buy now, pay later (BNPL) offerings are increasingly converging, competing for consumer spend while navigating evolving credit conditions, merchant economics and regulatory oversight.
American Express Company (AXP - Free Report) and Affirm Holdings, Inc. (AFRM - Free Report) operate within this overlapping landscape, each targeting transaction growth through distinct approaches. AXP relies on its closed-loop network, premium customer base and revolving credit model, whereas AFRM emphasizes installment-based lending embedded at checkout through merchant partnerships. Differences in business model, revenue composition and credit exposure define how each is positioned within the evolving consumer finance ecosystem.
Let’s dive deep and closely compare the fundamentals of the two stocks to determine which one has more upside now.
The Case for American Express
American Express continues to benefit from strong spending momentum, with card member spending rising 10% year over year in the first quarter of 2026, the fastest pace in three years. Growth was broad-based across goods & services and travel and entertainment, supported by resilient consumer demand and steady activity across both domestic and international markets.
The company’s premium positioning remains a key driver of growth. Luxury retail spending increased 18% in the quarter, reflecting resilience among higher-income consumers, while engagement with premium products continues to strengthen. The U.S. Platinum portfolio is experiencing improved spend trends following recent product refreshes, alongside consistently high retention rates even after fee increases.
Customer acquisition and mix further support long-term durability. More than 70% of new accounts are tied to fee-paying products, reinforcing a shift toward higher-value customers. At the same time, Millennial and Gen Z cohorts are contributing meaningfully to new accounts and spending growth, indicating that the premium model continues to resonate with younger demographics.
Credit performance and financial discipline further reinforce stability in the model. Delinquency and write-off rates remain below pre-pandemic levels, while revenue growth is supported by multiple streams, including fees and net interest income. In the first quarter of 2026, total revenues (net of interest expenses) increased 11% year over year, while total transactions rose 10%. The company beat earnings in three of the past four quarters and missed once, with an average surprise of 3.9%.
American Express Company Price, Consensus and EPS Surprise
American Express Company price-consensus-eps-surprise-chart | American Express Company Quote
American Express is advancing its growth strategy through targeted investments in product innovation, partnerships and technology. The company is expanding its premium value proposition via new commercial card offerings, enhanced expense management tools and deeper integrations across its network. Additionally, it is building out AI-driven capabilities, including agentic commerce solutions and fraud prevention tools, aimed at improving transaction security, personalization and customer experience within its closed-loop ecosystem.
However, continued investments in marketing, rewards programs and customer value propositions are central to the company’s growth strategy but may keep the expense base elevated relative to revenues. Total expenses rose 6% in 2024, 11.1% year over year in 2025 and 11% in the first quarter of 2026.
The Case for Affirm
Affirm’s growth is being driven by expanding transaction volumes and increasing platform adoption. Revenues rose 30% year over year in the second quarter of fiscal 2026, supported by higher engagement from active consumers and a steady increase in transactions per user. Merchant additions and broader acceptance are also contributing to overall volume growth. Gross Merchandise Volume improved 36% year over year in the same period.
As the platform continues to scale, its growth is becoming more diversified. Instead of relying heavily on a few large partners, a growing share of activity is now coming from a broader mix of merchants, including smaller and emerging categories. This shift toward a more distributed merchant network reflects deeper penetration across the commerce ecosystem.
The company’s core proposition is rooted in BNPL, offering transparent, installment-based financing, particularly through its 0% offerings. This continues to resonate with consumers and merchants, driving conversion rates and repeat usage. Products like the Affirm Card are emerging as meaningful growth drivers, expanding usage beyond point-of-sale financing and deepening customer engagement within the ecosystem. It beat earnings estimates in each of the past four quarters with an average of 83.5%.
Affirm Holdings, Inc. Price, Consensus and EPS Surprise
Affirm Holdings, Inc. price-consensus-eps-surprise-chart | Affirm Holdings, Inc. Quote
Expansion initiatives are further broadening the opportunity set. International markets, particularly the U.K., along with newer verticals like services and digital wallets, are opening additional growth avenues. Meanwhile, stable credit trends and improving funding conditions support the company’s ability to scale while maintaining control over risk.
Affirm is leveraging artificial intelligence to enhance its platform through data-driven optimization and personalization. Tools like Boost AI enable automated A/B testing of financing offers, allowing merchants to dynamically optimize conversion rates and allocate promotional spend more efficiently. AI-driven underwriting and real-time decisioning are supporting more precise risk assessment and tailored consumer financing options.
However, it continues to face a rise in total expenses. Total operating expenses rose 15.5% year over year in the second quarter, mainly due to higher funding costs, provision for credit losses, loss on loan purchase commitment and processing and servicing expenses.
How Do Estimates Compare for AXP & AFRM?
The Zacks Consensus Estimate suggests sharper earnings momentum for Affirm. The consensus estimates for AXP’s 2026 earnings indicate a 14% increase from a year ago, followed by 14.1% growth next year. Meanwhile, the consensus estimate for 2026 revenues suggests 9.2% growth.
On the other hand, the Zacks Consensus Estimate for AFRM’s fiscal 2026 EPS indicates a 620% year-over-year surge, followed by 58.7% growth next year. The consensus estimate for fiscal 2026 revenues suggests 28.5% growth.
Valuation: AXP vs. AFRM
Coming to the valuation story, Affirm trades at a higher price-to-sales multiple, reflecting its growth profile, while AXP’s lower multiple mirrors its maturity. AFRM is currently trading at 4.21X forward P/S, above AXP’s 2.70X.
Image Source: Zacks Investment Research
Price Target
AXP currently trades below its average analyst price target of $357.62, implying a 7.4% potential upside from current levels. AFRM also trades below its average analyst price target of $81.70, implying an attractive 22.7% potential upside from current levels.
Price Performance Comparison
Over the past year, shares of AFRM have outperformed AXP. Meanwhile, the S&P 500 has increased 33.2% during this time.
Price Performance – AXP, AFRM & S&P 500
Image Source: Zacks Investment Research
Conclusion
American Express reflects a more mature and stable business model, supported by its premium customer base, consistent spending trends and disciplined credit performance. In contrast, Affirm is demonstrating a faster growth profile, driven by expanding BNPL adoption, increasing merchant partnerships and strong momentum across key operating metrics.
For investors seeking rapid future gains rather than stability, Affirm has the edge at the moment, even though the companies currently carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.