Bank of America just raised its EUR/USD forecast
Investing.com - RBC Capital has raised its price target on Affirm Holdings Inc. (NASDAQ:AFRM) to $75.00 from $70.00 while maintaining a Sector Perform rating on the stock. The buy-now-pay-later company, currently valued at $23.1 billion, has seen its shares surge over 150% in the past year according to InvestingPro data.
The adjustment comes as RBC recalibrates its model for Affirm, noting the company is expected to reach GAAP operating profitability and assume a 25% tax rate in fiscal year 2026. InvestingPro analysis shows the company maintaining strong revenue growth of 42.5% despite current unprofitability, with a healthy current ratio of 13.47x.
RBC has lowered its FY26 gross merchandise volume (GMV) estimate to $45.6 billion from $46.0 billion, citing anticipated volume declines from Walmart (NYSE:WMT) in that period, though this will be partially offset by ramping volumes in the UK.
The firm also reduced its FY26 GAAP operating income forecast to $219 million from $254 million, and net income estimates to $224 million from $334 million, factoring in Affirm’s investments in sales and marketing to drive international growth.
RBC’s new price target represents approximately 6x its calendar year 2026 enterprise value to revenue estimate, which the firm attributes to the resilient consumer environment and Affirm’s demonstrated ability to navigate credit stress.
In other recent news, Affirm has reported significant developments that are likely to interest investors. The company announced a partnership expansion with PGIM Fixed Income, involving a $3 billion revolving pass-through loan sale facility over 36 months. This facility will purchase up to $500 million of Affirm loans at any given time. Additionally, Affirm extended its capital partnership with Moore Specialty Credit through May 2027, with Moore having invested nearly $5 billion in Affirm’s assets since 2017. Meanwhile, Affirm has partnered with Xsolla to offer flexible payment options to gamers in the United States, allowing players to split purchases into interest-free installments. The company also faces potential revenue challenges, as Needham analysts maintained a Hold rating on Affirm, citing concerns about Walmart’s possible shift to competitor Klarna/OnePay. Lastly, Prudential (LON:PRU) Financial (NYSE:PRU)’s investment arm reportedly agreed to purchase up to $500 million in consumer loans from Affirm, enabling the company to finance up to $3 billion in buy-now-pay-later loans. These developments reflect Affirm’s ongoing efforts to expand its financial partnerships and services.
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