Key Takeaways Affirm's Q4 fiscal 2026 GMV rose 36%, revenues climbed 33% and active users increased 21%.Affirm's 30 day delinquency rate was 2.5%, down 26 bps sequentially but up 19 bps year over year.Moderate consumer pressure can boost Affirm demand without significantly hurting credit quality. In recent interviews with CNBC and Bloomberg, Affirm Holdings, Inc. (AFRM - Free Report) CEO Max Levchin pointed to growing pressure on U.S. consumers from higher gas prices and inflation. Rising everyday costs are squeezing household budgets, but they are also making installment payments more useful, prompting more shoppers to turn to Affirm to preserve cash or spread out larger purchases.
That does not automatically make a tougher economy bullish for Affirm. The key is how much stress consumers can absorb. Moderate pressure can lift demand without materially weakening credit quality. Severe pressure is different. If borrowers move from wanting more flexibility to simply being unable to afford purchases, delinquencies and charge-offs can rise, forcing Affirm to tighten approvals and absorb higher credit costs.
So far, the operating picture looks more supportive than alarming. Affirm has continued to post strong growth in gross merchandise volume (up 36% in the fourth quarter of fiscal 2026), revenues (up 33%) and active users (up 21%), while credit trends remain manageable. Its underwriting model also gives it room to decline higher-risk applications, adjust credit limits and require down payments as risk conditions change. Affirm's 30+ day delinquency rate on monthly installment loans was 2.5%, down 26 basis points sequentially, although it was 19 basis points higher year over year.
Funding conditions remain worth watching, but the broader picture is constructive. As long as repayment trends remain stable and underwriting stays disciplined, rising demand for flexible payments could continue supporting Affirm’s growth while keeping credit performance on a healthy footing.
AFRM’s YTD Price PerformanceOver the year-to-date period, shares of Affirm have declined 2.9% against the 0.8% growth of the industry it belongs to.
Image Source: Zacks Investment Research
Zacks Rank & Key PicksAffirm currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader payments space are Remitly Global, Inc. (RELY - Free Report) , Usio, Inc. (USIO - Free Report) and Repay Holdings Corporation (RPAY - Free Report) . While Remitly Global currently sports a Zacks Rank #1 (Strong Buy), Usio and Repay Holdings are carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Remitly Global’s current-year earnings indicates a 390.6% year-over-year surge to $1.57 per share. It has witnessed one upward estimate revision and no downward movement over the past 30 days. The consensus estimate for RELY’s current-year revenues is pegged at $1.98 billion, implying 21.4% year-over-year growth.
The Zacks Consensus Estimate for USIO’s current-year earnings indicates an 88.9% year-over-year improvement. USIO has witnessed one upward estimate revision over the past month against no cuts. The consensus estimate for current-year revenues indicates 13.9% year-over-year growth.
The Zacks Consensus Estimate for Repay Holdings’ current-year earnings indicates 26.8% year-over-year growth. RPAY witnessed one upward estimate revision over the past month and no downward movement. The consensus estimate for current-year revenues implies a 60.1% year-over-year jump.
Bernstein zvýšila cílovou cenu Affirm na 110 USD z 100 USD a ponechala doporučení Outperform, ale akcie během obchodování klesly o 6,12 %. Firma upozornila na růst počtu obchodníků o 51 % na 571 000 a na 5,2 milionu uživatelů Affirm Card.
Merchant count rose 51% to 571,000 as the Affirm Card reached 5.2 million users Summary
Bernstein lifted its target to $110 citing merchant and card growth, while the stock traded in the opposite direction.
Bernstein SocGen raised its price target on Affirm Holdings AFRM to $110 from $100, keeping an Outperform rating and pointing to network effects across merchants, the Affirm Card and newer verticals. The firm initiated coverage in July at $100. Affirm shares were down 6.12% intraday.
The raise follows fiscal fourth quarter results reported August 27. Revenue less transaction costs, Affirm's non-GAAP measure, came in 7% ahead of consensus, and adjusted operating income beat by 12%. Gross merchandise volume ran 5% above consensus on growth in both Pay in X products and interest-bearing loans. Fiscal 2027 guidance for revenue less transaction costs landed 4% above consensus, with adjusted operating income guidance in the teens above.
Merchant count rose 51% to 571,000, an acceleration of eight percentage points, and Affirm now works with 80 of the top 250 US merchants. The Affirm Card has 5.2 million users, with gross merchandise volume up 125% year over year. Bernstein said newer verticals are growing at two to three times the rate of the overall business, helped by independent software vendor partnerships.
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
Affirm vykázal ve 4. čtvrtletí lepší než očekávané výsledky a zvýšil výhled tržeb na 1,19 až 1,22 miliardy USD, nad odhadem 1,16 miliardy USD. Akcie v premarketu vzrostly o 11,2 %.
Affirm Holdings Inc (NASDAQ:AFRM) on Thursday reported better-than-expected fourth-quarter financial results and issued first-quarter sales guidance above estimates.
Affirm reported quarterly earnings of $4.62 per share, according to Benzinga Pro data. Quarterly revenue came in at $1.17 billion, which beat the analyst consensus estimate of $1.11 billion and was up from $876.42 million in the same period last year.
"We delivered another outstanding set of results this quarter, especially in the broader context of global economic uncertainty," said CEO Max Levchin.
Affirm expects first-quarter revenue in a range of $1.19 billion to $1.22 billion, versus the $1.16 billion analyst estimate.
Affirm shares rose 11.2% to $86.20 in pre-market trading
These analysts made changes to their price targets on Affirm following earnings announcement.
Needham analyst Kyle Peterson maintained the stock with a Buy and raised the price target from $90 to $100. B of A Securities analyst Matthew O’Neill maintained the stock with a Buy and raised the price target from $93 to $104. Morgan Stanley analyst James Faucette maintained the stock with an Equal-Weight rating and raised the price target from $80 to $82. BMO Capital analyst Rufus Hone maintained the stock with an Outperform rating and raised the price target from $86 to $101. Trending
Considering buying AFRM stock? Here’s what analysts think:
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Affirm se vrací do Austrálie spuštěním Shop Pay Installments přes Shopify, což má zvýšit GMV i výnosy. Ve 4. čtvrtletí fiskálního roku 2026 GMV vzrostl o 36 % na 14,1 miliardy USD a výnosy o 33 % na 1,17 miliardy USD.
Key Takeaways Affirm returned to Australia by launching Shop Pay Installments with Shopify.The rollout gives Affirm access to Shopify's Australian merchants and is expected to add GMV and revenue.Affirm ended fiscal 2026 with GMV up 36%, revenue up 33% and active merchants up 51%. Affirm Holdings, Inc. (AFRM - Free Report) recently expanded its partnership with Shopify by launching Shop Pay Installments in Australia. The service is powered exclusively by Affirm and sits inside Shopify’s Shop Pay checkout. Affirm makes a real-time underwriting decision on every transaction and does not charge late fees, account fees or compounding interest. The launch marks the company’s return to Australia after it wound down operations there in 2023 as part of a broader effort to focus on growth and profitability.
The re-entry gives Affirm access to Shopify’s Australian merchant base while advancing a broader global partnership already spanning the United States, Canada and the U.K., with further expansion planned across Western Europe. AFRM can help merchants boost conversions and basket sizes by making larger purchases easier for customers to manage.
Shop Pay has more than 250 million buyers globally, while over 90% of Affirm purchases in North America come from repeat customers. That creates a large channel and strengthens Affirm’s international expansion opportunity over time.
The Australian rollout is expected to add GMV and transaction-driven revenue as adoption builds, while also widening Affirm’s merchant network. In fourth quarter fiscal 2026, GMV jumped 36% to $14.1 billion, revenues rose 33% to $1.17 billion and revenue less transaction costs increased 39% to $589 million.
Active consumers climbed 21% to 27.8 million, while transaction per active consumer grew 20%, giving Affirm a larger base for international growth and recurring transaction volume across new markets over time. Also, active merchant count surged 51% to 571,000 as of June 30, 2026.
How Are Peers Placed?Affirm is going back to a competitive Australian BNPL market, where several companies already have established positions. PayPal Holdings Inc. (PYPL - Free Report) has considerable reach through Pay in 4. PayPal says the product is available across more than 9 million active Australian PayPal accounts, while its 2025 survey showed usage among 51% of Australian BNPL users, up from 45% a year earlier.
Meanwhile, Block, Inc. (XYZ - Free Report) is one of the strongest competitors through Afterpay, which originated in Australia. Afterpay currently cites about 4.4 million active consumers in Australia and New Zealand. PayPal’s 2025 Australian survey found that 78% of Australian BNPL users had used Afterpay in the prior six months.
Affirm’s Price Performance, Valuation and EstimatesShares of Affirm have gained 4.1% year to date, outperforming the broader industry but trailing the S&P 500 Index.
Affirm’s YTD Price Performance Image Source: Zacks Investment Research
From a valuation standpoint, Affirm trades at a forward price-to-earnings ratio of 41.42X, up from the industry average of 27.93X. AFRM carries a Value Score of D.
It beat earnings estimates in each of the past four quarters, with an average surprise of 379.4%.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AFRM oznámila nejziskovější čtvrtletí v historii bez započtení daňového uvolnění a ve fiskálním 4. čtvrtletí 2026 překonala odhady ziskem na akcii i tržbami. Firma zároveň urychluje expanzi karet, nákupů v obchodech a obchodníků.
Key Takeaways AFRM posted its most profitable quarter ever, excluding a tax allowance release, as Q4 beat estimates.AFRM targets card, in-store and merchant expansion, with card users generating about twice typical usage.AFRM will keep credit discipline tight while building U.K., Edge and longer-term products beyond fiscal 2027. Affirm Holdings, Inc. (AFRM - Free Report) used its fiscal fourth-quarter 2026 earnings call to emphasize growth, tighter execution and a wider product roadmap after what CEO Max Levchin called the company’s most profitable quarter ever, excluding a tax allowance release. The quarter ended on June 30, 2026.
The company reported fiscal fourth-quarter earnings per share (EPS) of $4.62, which beat the Zacks Consensus Estimate of $0.33. Revenues of $1.17 billion surpassed the consensus mark of $1.10 billion.
AFRM Sets the Fiscal 2027 Profitability ToneChief Financial Officer Rob O’Hare said that fiscal 2027 revenue less transaction costs should reflect take rates broadly consistent with fiscal 2026, supported by current funding costs and a similar funding mix.
Management’s outlook implies a 4.16% revenue-less-transaction-costs rate for fiscal 2027, above the 3.25%-4% midterm range referenced during the Q&A. O’Hare also expects only a slight shift toward interest-bearing loans.
On a GAAP EPS basis, O’Hare stopped short of a precise forecast. He reiterated a mid-to-high-20% run-rate tax rate while cautioning that accounting and stock-compensation effects can create volatility.
Affirm Pushes Card and In-Store ExpansionLevchin, founder, CEO and chairman, said that in-store commerce remains a major product opportunity, but the experience requires more work around connectivity, point-of-sale systems and transaction adjustments than online checkout.
He said that the company is developing in-store features intended to deliver more value despite added approval steps, with new ideas expected in coming quarters. E-commerce expansion remains a parallel priority.
Affirm Card is another focus. Levchin said that card users generate about twice the usage of typical customers, while card attachment stands at 19% of active users. Management plans card-specific features to lift both adoption and engagement.
AFRM Sees More Merchant GreenfieldA Redburn analyst pressed management on why Affirm remains available at only a portion of major e-commerce merchants despite broader payment-platform integrations. Levchin framed the gap as an opportunity rather than a sales constraint.
He said that large merchants often face long implementation cycles because legacy systems require significant modifications. That limits how quickly new checkout options can be added even when merchants are receptive.
Levchin also emphasized network effects. He said that adding consumers and merchants should make the platform more valuable to both sides, reinforcing Affirm’s long-term focus on network scale rather than short-term product shifts.
Affirm Keeps Credit Discipline CentralA Wells Fargo analyst asked whether resilient consumer performance creates room to loosen underwriting. Levchin rejected the idea of treating credit policy as a single broad lever.
He said Affirm makes roughly 100 million transaction-level credit decisions per quarter and continually adjusts policy across consumers, merchants and transaction classes. Credit targets remain an input to growth rather than an output.
Levchin added that management would slow growth before accepting a meaningful credit disturbance. O’Hare separately said that current consumer-credit performance does not give management pause in its fiscal 2027 assumptions.
AFRM Builds U.K. and Edge OpportunitiesLevchin described early U.K. performance as solid, citing positive merchant feedback and consumer receptivity. He also said that management had not observed a notable competitive response from incumbents so far.
Affirm Edge is moving more deliberately. Levchin said that bank partners face regulatory and implementation requirements, while Affirm is still completing parts of the technology needed for partner-controlled financing programs.
He expects the first launches to require close support and said that the company will prioritize execution quality over speed. Affirm Money Account is also being developed as a first-party model for the Edge experience.
Affirm Keeps Its Long-Term Product FocusLevchin said that his expanded product focus will increasingly target initiatives that may not contribute until fiscal 2028, fiscal 2029 and beyond. The current outlook instead reflects products already operating and generating profits.
Management’s call tone combined confidence in the existing network with restraint around newer initiatives. The company is pushing merchant coverage, card usage, international growth and bank partnerships without building near-term guidance around unproven products.
What AFRM’s Zacks Signals IndicatePresently, AFRM carries a Zacks Rank #3 (Hold), alongside a Value Score of D, a Growth Score of A, a Momentum Score of A and a VGM Score of B. The Style Score framework treats A and B readings as stronger, while D is less favorable. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Growth, Momentum and VGM scores therefore provide stronger style signals than Value, but the Zacks Rank remains the primary indicator in the framework. The Zacks Rank can change as analyst earnings estimates are revised after the newly reported results.
SAN FRANCISCO--(BUSINESS WIRE)--Affirm Holdings, Inc. (NASDAQ: AFRM) today announced it will publish its fourth quarter fiscal year 2026 shareholder letter, including its financial results, on its investor relations website at https://investors.affirm.com/ on Thursday, August 27, 2026, after market close. The Company will host a conference call and webcast at 2:00pm PT that same day. Hosting the call will be Max Levchin (Founder and Chief Executive Officer), Michael Linford (Chief Operating Officer), and Rob O'Hare (Chief Financial Officer).
A replay will be available on the investor relations website following the call.
About Affirm
Affirm’s mission is to deliver honest financial products that improve lives. By building a new kind of payment network—one based on trust, transparency, and putting people first—we empower millions of consumers to spend and save responsibly, and give thousands of businesses the tools to fuel growth. Unlike most credit cards and other pay-over-time options, we never charge any late or hidden fees. Follow Affirm on social media: LinkedIn | Instagram | Facebook | X.
Affirm rozšířil službu BNPL na Bed Bath & Beyond, Overstock a buybuy BABY pro oprávněné zákazníky. Tím posiluje svou přítomnost v segmentu domácností a širší síť obchodníků.
Key Takeaways Affirm will offer BNPL across Bed Bath & Beyond, Overstock and buybuy BABY for eligible shoppers.AFRM had about 515,000 active merchants as of March 31, 2026, up 43.8% year over year.AFRM's Q3 FY26 GMV rose 35% and total transactions increased 45% year over year. Affirm Holdings, Inc. (AFRM - Free Report) has entered a new partnership with Bed Bath & Beyond, making its buy now, pay later (BNPL) solution available to eligible shoppers across the retailer's brands, including Bed Bath & Beyond, Overstock and buybuy BABY. Customers can choose to pay for purchases in biweekly or monthly installments with no late or hidden fees, offering greater payment flexibility while shopping for home-related products.
The agreement expands Affirm's presence in the home retail market, where purchases often involve a higher ticket size than everyday discretionary spending. By giving consumers more payment choices at checkout, the company could attract new users and encourage higher transaction activity. The partnership also allows Affirm to reach shoppers during key life events, such as moving into a new home or preparing for a growing family.
The addition further strengthens AFRM's merchant portfolio. As of March 31, 2026, the company’s active merchants were around 515,000, up 43.8% year over year. Expanding relationships with well-known brands enhances the company's reach, increases consumer touchpoints and supports growth in gross merchandise volume (GMV). In the third quarter of fiscal 2026, GMV grew 35% year over year, while total transactions increased 45%, highlighting strong platform engagement.
As demand for flexible payment solutions continues to grow, adding established retailers can support broader platform adoption and higher payment volumes. The Bed Bath & Beyond partnership aligns with Affirm's strategy of expanding its merchant network and should strengthen its long-term growth opportunities in the evolving digital payments landscape.
How Are Competitors Faring?Some of AFRM’s competitors in the BNPL space are PayPal Holdings, Inc. (PYPL - Free Report) and Visa Inc. (V - Free Report) .
PayPal reported 439 million active accounts in the first quarter of 2026, which rose 1% year over year. Its net revenues increased 7% year over year to $8.4 billion in the same quarter. Additionally, PayPal’s total payment volume increased 11% year over year in the first quarter of 2026.
Visa’s processed transactions increased 9% year over year in the second quarter of fiscal 2026. Visa’s payment volume rose 9% year over year in the second quarter of fiscal 2026, along with 17% growth in net revenues.
Affirm’s Price Performance, Valuation & EstimatesOver the past year, AFRM’s shares gained 21.2% against the industry’s fall of 19.5%.
Image Source: Zacks Investment Research
From a valuation standpoint, AFRM trades at a forward price-to-sales ratio of 6.66, above the industry average of 3.66.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Affirm’s fiscal 2026 earnings implies 726.7% growth from the year-ago period. The consensus mark for fiscal 2026 revenues indicates 30.6% year-over-year growth.
Image Source: Zacks Investment Research
Affirm currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Affirm uzavřel partnerství s Backcountry a rozšiřuje tak svou síť obchodníků v outdoorovém segmentu. Zákazníci mohou u nákupu rozdělit platbu do splátek bez pozdních poplatků či skrytých nákladů.
Key Takeaways Affirm adds Backcountry, expanding its footprint in the outdoor recreation market.More merchant partnerships can boost GMV, transactions and user engagement.Flexible payment options may increase conversion rates and average order values. Affirm Holdings, Inc. (AFRM - Free Report) recently announced a partnership with outdoor gear retailer Backcountry, giving shoppers a new way to pay for purchases over time at checkout. Customers buying outdoor equipment, apparel, footwear and adventure gear can select Affirm and split purchases into multiple installments, depending on eligibility.
The offering includes transparent payment schedules, with no late fees or hidden charges. The move expands Affirm’s presence in the outdoor recreation category and adds another merchant to its growing network. AFRM’s active merchant count jumped 44% year over year in the third quarter of fiscal 2026 to 515,000. For Backcountry, the partnership provides customers with added payment flexibility, especially for higher-ticket purchases that can make outdoor activities more accessible.
Outdoor gear purchases can be expensive, particularly for premium equipment and seasonal adventures. By adding Affirm, Backcountry lowers the upfront cost barrier for customers while maintaining pricing transparency. The partnership can improve conversion rates, encourage larger purchases and attract shoppers who want flexibility without relying on traditional credit cards.
The partnership could support higher gross merchandise volume (GMV) for Affirm by generating additional transaction activity. The company’s GMV rose 35% year over year to $11.6 billion in the third quarter of fiscal 2026. It expects to generate GMV of $49.265-$49.565 billion for fiscal 2026.
More merchant integrations also strengthen Affirm’s network effect, helping the company acquire users and increase engagement across categories. For Backcountry, offering AFRM’s BNPL options may lift average order values.
AFRM’s YTD Price PerformanceOver the year-to-date period, shares of Affirm have gained 5.2% against the 16.7% fall of the industry it belongs to.
Image Source: Zacks Investment Research
Zacks Rank & Key PicksAffirm currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader payments space are Klarna Group plc (KLAR - Free Report) , Paymentus Holdings, Inc. (PAY - Free Report) and Remitly Global, Inc. (RELY - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Klarna’s current-year earnings indicates a 105.1% year-over-year improvement. KLAR has witnessed four upward estimate revisions over the past 60 days against no movement in the opposite direction. The consensus estimate for current-year revenues is pegged at $4.44 billion, indicating 26.5% year-over-year growth.
The Zacks Consensus Estimate for Paymentus’ current-year earnings indicates a 19.7% year-over-year jump. PAY beat earnings estimates in each of the trailing four quarters, with the average surprise being 12%. The consensus estimate for current-year revenues implies 19.9% year-over-year growth.
The consensus estimate for Remitly Global’s current-year earnings indicates a 331.3% year-over-year surge to $1.38 per share. It has witnessed one upward estimate revision and no downward movement over the past 60 days. The consensus estimate for RELY’s current-year revenues is pegged at $1.97 billion, implying 20.4% year-over-year growth.
Affirm za poslední měsíc vzrostl o 13,3 % díky růstu aktivních uživatelů, počtu karet a transakcí. Rizikem zůstává vyšší zadlužení a rostoucí tvorba opravných položek na očekávané úvěrové ztráty.
Key Takeaways Affirm's expanding ecosystem and card growth are driving stronger user engagement.Earnings estimates and GMV outlook point to continued momentum for AFRM.Rising leverage and higher credit-loss provisions remain risks to watch. Shares of Affirm Holdings, Inc. (AFRM - Free Report) have climbed 13.3% over the past month, handily beating the broader industry, which slipped 2.6%, while the S&P 500 was little changed. The rally reflects growing confidence in the company’s growth prospects, improving profitability and an expanding ecosystem. Among major buy now, pay later (BNPL) peers, PayPal Holdings, Inc. (PYPL - Free Report) has fallen 3.9% during the same period, while Klarna Group plc (KLAR - Free Report) has gained 13.7%.
Price Performance – AFRM, PYPL, KLAR, Industry & S&P 500 Image Source: Zacks Investment Research
Let’s look at its growth drivers.
AFRM’s New Initiatives Are Opening More DoorsAffirm’s newer offerings are beginning to play a bigger role in its growth story. The Affirm Card, digital wallet integrations, agentic commerce initiatives and the recently launched Affirm Edge are creating additional ways for customers to use the platform. Active cardholders reached 4.4 million in the fiscal third quarter, while card GMV alone soared 146% year over year, helped by the company’s cash-flow underwriting model.
Affirm also strengthened its relationship with Google by integrating its BNPL services to Google Search, AI Mode and the Gemini app through Google Pay. The move expands its reach and could drive higher transaction volumes over time.
Funding capacity also continues to improve. Earlier this month, Affirm expanded its partnership with Canada Pension Plan Investment Board. The agreement is expected to support roughly $8 billion in consumer loan volume over the next two years, underscoring institutional confidence in the company’s underwriting and credit performance.
AFRM Building Scale Across Consumers and MerchantsDespite uncertainty in the broader economy, Affirm continues to deepen its presence through partnerships, product innovation and a growing customer base. These efforts are expanding its addressable market and reducing reliance on any single growth driver.
Active consumers rose 22% year over year to 26.8 million in the fiscal third quarter. Usage is spreading beyond large purchases into categories such as groceries, fuel, travel and subscriptions, making the platform more relevant to everyday spending.
Transactions increased 45% to 45.3 million in the latest quarter. Repeat users accounted for about 96% of total transactions, showing that customers continue to come back. Gross merchandise volume rose 35% to $11.6 billion. For fiscal 2026, management expects GMV between $49.265 billion and $49.565 billion. It has also outlined a medium-term goal of reaching $100 billion in annual GMV, supported by at least 25% yearly growth.
Merchant adoption is also gaining momentum. Active merchants climbed 44% from a year ago to 515,000 as of March 31, 2026, reflecting steady demand for flexible payment options.
Earnings Outlook for AFRM Remains BrightThe Zacks Consensus Estimate for fiscal 2026 earnings of $1.25 per share indicates a 733.3% year-over-year surge, while the estimate for fiscal 2027 earnings implies further growth of 35.6%. Moreover, the consensus mark for fiscal 2026 and 2027 revenues suggests 30.6% and 26.5% year-over-year growth, respectively.
It has delivered solid financial results lately, beating earnings estimates in each of the trailing four quarters, the average surprise being 74.9%.
Risks Still Deserve AttentionThe outlook is not without challenges. Inflation concerns and uneven economic conditions continue to raise questions about consumer spending and borrowers’ ability to manage debt. Provision for credit losses increased 24.6% in the first nine months of fiscal 2026, reflecting a more cautious view of the environment.
Competition is intensifying as Klarna and other fintech firms aggressively pursue market share. Walmart’s decision last year to replace Affirm with Klarna as its exclusive BNPL provider highlighted how quickly key partnerships can change.
Leverage is another concern. Funding debt stood at $2.4 billion at the end of the fiscal third quarter, up from $1.6 billion at fiscal 2025-end. The company’s debt-to-capital ratio of 67.7% remains well above the industry average of 21.4%. PayPal, by comparison, stands at 32%.
The stock trades at 4.67X forward 12-month sales, slightly above its three-year median of 4.40X and the industry average of 3.66X, leaving little room for disappointment. PayPal and Klarna trade far lower, at 1.07X and 1.46X forward sales, respectively.
ConclusionAffirm is executing well, supported by strong user engagement, expanding products and improving earnings prospects. Its growing merchant network and rising transaction volumes provide a solid foundation for long-term growth. However, elevated leverage, rising credit-loss provisions, intense competition and a premium valuation remain key concerns.
While the company’s growth story remains compelling, these risks warrant caution in the short run. Reflecting the balance between favorable fundamentals and the challenges, Affirm currently carries a Zacks Rank #3 (Hold), suggesting investors may want to wait for a more attractive entry point or additional catalysts. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
