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On Friday, BMO Capital Markets maintained a positive outlook on Affirm Holdings Inc. (NASDAQ: NASDAQ:AFRM), raising the price target to $64 from $62 while keeping an Outperform rating on the stock. BMO Capital’s analyst cited the company’s strong execution against high market expectations as the primary reason for the price target adjustment. The new target sits within the broader analyst range of $45 to $85, with InvestingPro data showing the stock has delivered an impressive 55.87% return over the past year despite its characteristic high volatility.
Affirm’s third-quarter fiscal year 2025 results were slightly below the expectations of some investors, which led to a 9% drop in share price after hours. Nevertheless, the company’s performance was largely consistent with Wall Street’s projections. The firm’s forward-looking guidance for the fourth quarter of FY2025 was a highlight, forecasting an increase in Gross Merchandise Volume (GMV) and Revenue Less Transaction (JO:NTUJ) Costs (RLTC) by 4% and 3%, respectively. These figures stand 3% and 1% above the Street’s expectations. InvestingPro data reveals strong revenue growth of 46.27% over the last twelve months, though the company remains unprofitable with an EBITDA of -$103.91 million.
The analyst pointed out that Affirm’s GMV growth has accelerated for the third consecutive quarter, partly driven by robust growth in direct-to-consumer (D2C) and Affirm Card GMV. Moreover, the analyst noted that there are no signs of near-term credit deterioration, a concern that has been on the minds of many investors. According to InvestingPro analysis, the company maintains a healthy current ratio of 12.29, indicating strong ability to meet short-term obligations. For deeper insights into Affirm’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In explaining the rationale behind the increased price target, the analyst expressed confidence in Affirm’s trajectory and rolled forward the valuation by one quarter. The revised target reflects the company’s continued momentum and the analyst’s expectation of sustained growth.
Affirm Holdings Inc. specializes in providing buy now, pay later solutions, and its performance is closely watched by investors interested in the fintech sector. The company’s ability to outperform in key areas, despite challenging market expectations, has kept analyst sentiment positive on its future prospects.
In other recent news, Affirm Holdings Inc. reported its financial results for the third quarter of fiscal year 2025, surpassing earnings per share (EPS) expectations with an actual EPS of $0.01, compared to a forecast of -$0.01. The company also slightly exceeded revenue expectations, reporting $783.14 million against a forecast of $781.74 million. Despite these positive results, Affirm’s stock saw a decline in aftermarket trading. The company experienced a 36% year-over-year growth in Gross Merchandise Volume (GMV), which was notably strong in March with a 40% increase. In terms of analyst actions, Mizuho (NYSE:MFG) Securities adjusted its price target for Affirm, reducing it from $84 to $70, while maintaining an Outperform rating. Similarly, JPMorgan revised its price target to $69 from $74, continuing to endorse the stock with an Overweight rating. JMP Securities also lowered its price target for Affirm from $85 to $75, while maintaining a Market Outperform rating. These adjustments reflect broader market trends and the company’s strategic focus on 0% APR loan offerings, which have been popular among consumers and merchants.
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