Affirm stock price target raised to $85 at JMP Securities

On Friday, JMP Securities updated its outlook on Affirm Holdings Inc. (NASDAQ: NASDAQ:AFRM), increasing the price target to $85 from the previous $78, while retaining a Market Outperform rating for the stock. The firm’s analysts highlighted their confidence in Affirm’s potential to disrupt the traditional credit card sector, citing the company’s advantage in the Buy Now, Pay Later (BNPL) market as a key factor for the adjustment. The stock has shown remarkable momentum, with a 156% surge over the past six months. According to InvestingPro data, the stock currently trades above its calculated Fair Value, reflecting strong investor optimism about its growth prospects.

The analysts at JMP Securities believe that Affirm stands out in the financial technology space due to its robust loan platform, which they consider superior to those of its competitors. This strength, they argue, positions Affirm to benefit from the growing consumer preference for BNPL solutions for everyday transactions. The company’s strong market position is reflected in its impressive 46.55% year-over-year revenue growth. InvestingPro subscribers can access additional insights through comprehensive Pro Research Reports, which provide deep-dive analysis of Affirm’s competitive positioning and growth metrics.

Affirm’s journey towards Generally Accepted Accounting Principles (GAAP) profitability is progressing faster than anticipated, according to JMP Securities. The firm also noted improvements in unit economics and user engagement, which contribute to a positive outlook for the company’s financial health. While InvestingPro analysis indicates the company isn’t currently profitable, its strong current ratio of 17.58 suggests robust financial stability, with liquid assets well exceeding short-term obligations.

The analysts also pointed to Affirm’s momentum in forging new partnerships, such as with Apple (NASDAQ:AAPL) Pay, expanding into new geographies like the UK, and securing funding sources, for instance from Sixth Street. These developments, coupled with what JMP Securities views as a favorable regulatory environment under the new administration, are expected to bolster Affirm’s growth trajectory.

Affirm Holdings Inc. is poised to continue its expansion and solidify its position in the market, supported by these strategic moves and the broader industry trends favoring alternative payment solutions.

In other recent news, Affirm Holdings has seen significant developments in its financial and strategic positioning. Compass Point recently upgraded Affirm’s stock rating to Neutral, with a target of $61, citing the company’s potential for growth and profitability. Analysts anticipate Affirm’s adjusted operating income margin to reach 30% by FY27E, driven by recurring member engagement and increasing transactions.

Affirm has also expanded its forward flow loan purchase program in partnership with Liberty Mutual Investments. The revised agreement could see the potential outstanding amount reach up to $750 million, supporting Affirm’s growth plans.

Needham maintained its Hold rating on Affirm, following an analysis of the potential benefits and risks of the company obtaining a banking license. RBC Capital Markets also adjusted its outlook on Affirm, raising the price target to $67 while maintaining a Sector Perform rating due to an optimistic view of the company’s financial prospects.

Affirm has additionally issued $920 million in 0.75% Convertible Senior Notes due 2029, creating a direct financial obligation. This move, along with the repurchase of $960 million in aggregate principal amount of its 0% convertible notes due 2026, reflects Affirm’s strategic financial maneuvers. These recent developments highlight Affirm’s evolving financial landscape and strategic partnerships.

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