Evercore ISI reiterates Outperform on Affirm stock despite near-term caution

Investing.com - Evercore ISI maintained its Outperform rating and $67.00 price target on Affirm Holdings Inc. (NASDAQ:AFRM), currently trading at $78.24 with a market cap of $25.3 billion, while adding the stock to its Tactical Underperform List ahead of upcoming earnings. According to InvestingPro analysis, the stock appears to be trading above its Fair Value.

The research firm cited potential near-term headwinds for Affirm, noting the stock has surged 115% since early April and 18% since August 1, making it the best performer year-to-date among companies in its coverage universe. InvestingPro data confirms this exceptional performance, showing a 157.9% return over the past year and a 28.5% YTD gain.

Evercore ISI expressed concern about Affirm’s valuation, which is trading close to recent peak levels of high-20s next-twelve-months EV/EBITDA, and the limited likelihood that management would guide materially higher than consensus estimates.

Despite these short-term concerns, the firm emphasized this is not a change to its long-term positive investment thesis, stating Affirm "has the best risk platform in the space" and will benefit from expansion into new verticals, geographies, and products.

All attention now turns to Affirm’s fourth fiscal quarter earnings report scheduled for August 28, when management will provide fiscal year 2026 guidance, including volume and RLTC margin outlook.

In other recent news, Affirm has expanded its partnership with Stripe to introduce buy now, pay later (BNPL) capabilities in physical retail locations through Stripe Terminal devices. This integration allows merchants in the United States and Canada to offer Affirm’s payment options to in-store shoppers. Additionally, Affirm has broadened its collaboration with Google (NASDAQ:GOOGL) Pay by making its payment options available via Chrome’s autofill feature on desktop browsers, enhancing accessibility for U.S. consumers. In Canada, Affirm has partnered with New Look Vision Group to provide flexible payment plans for customers purchasing eyewear at various optical retailers.

RBC Capital has raised its price target for Affirm to $75 from $70, maintaining a Sector Perform rating. This adjustment reflects expectations for Affirm to achieve GAAP operating profitability by fiscal year 2026. Meanwhile, Needham has reiterated its Hold rating on Affirm, citing concerns about potential revenue challenges if Walmart (NYSE:WMT) transitions to Klarna/OnePay, which could impact Affirm’s fiscal year 2026 performance. These developments highlight Affirm’s ongoing efforts to expand its payment solutions and the varying analyst perspectives on its future prospects.

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