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Tuesday, February 27, 2024

Is Affirm Poised for a Comeback? Analyst Highlights Alternative in Current Dip – Affirm Holdings (NASDAQ:AFRM)

Truist analyst Andrew W. Jeffrey reiterated a Purchase ranking on Affirm Holdings Inc AFRM with an unchanged worth goal of $60.

Affirm is down 19% 12 months up to now versus the S&P 500 SPX +3%, according to early-year weak point in progress names that rallied in 2023. The analyst famous the softness as a possibility. 

The analyst famous that buyers are sidelined by overwrought credit score, liquidity, and BNPL sturdiness issues. 

Jeffrey expects Affirm’s vacation quarter to reveal Enterprise buyer share features, steady credit score developments, better-than-expected income much less transaction prices (RLTC), and powerful liquidity. 

He cited sturdy Cyber Monday BNPL progress, good vacation momentum, and certain Affirm Card upside.

The analyst is staunch class Bulls, setting him other than the Road. Jeffrey’s constructive outlook displays that BNPL is a sturdy tender sort on the intersection of debit and credit score, which the corporate is positioning as a every day spend product. 

The analyst famous that BNPL can develop from <1% of complete U.S. tender, based mostly on Affirm’s $7 trillion TAM estimated, to one thing considerably extra materials, simply as debit has within the final 20+ years. 

Jeffrey famous that Affirm could be a virtually $16 billion income firm (5.5% yield), producing $4 billion+ of EBITDA. 

Furthermore, the analyst stated that BNPL may account for greater than 7.5% of U.S. tender (not contemplating RoW potential) if it follows a trajectory much like that of U.S. debit.

The analyst tasks second-quarter income and EPS of $529.85 million (versus consensus of $518.75 million) and $(0.43) (versus consensus lack of $(0.72)).

Worth Motion: AFRM shares traded larger by 1.79% at $40.38 on the final test Friday.

Picture through Firm

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