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On Friday, JPMorgan analyst Reginald Smith adjusted the price target for Affirm Holdings Inc. (NASDAQ: NASDAQ:AFRM) shares, bringing it down to $69 from the previous $74, while continuing to endorse the stock with an Overweight rating. Currently trading at $54.26 with a market capitalization of $17.37 billion, InvestingPro analysis indicates the stock is currently overvalued. InvestingPro data shows significant price volatility, with the stock’s beta at 3.66. Smith noted that the company’s Gross Merchandise Volume (GMV) growth showed a sequential acceleration, defying broader spending and retail patterns. The company has demonstrated strong performance with revenue growth of 46.27% and a gross profit margin of 44.46%. According to InvestingPro data, while the company maintains robust growth, it remains unprofitable over the last twelve months, with analysts not expecting profitability this year. For deeper insights into Affirm’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
The analyst pointed out that the GMV increase was partly driven by interest-free installment loans, which serve as a profitable method for acquiring customers, albeit with a slight dilution to the take rate and the Residual Lifetime Customer Value (RLTC) margin. Despite this, Smith mentioned that the take rate and RLTC margin are still exceeding management’s long-term target range of 3%-4% for the RLTC margin. Additionally, the adjusted operating profit for the quarter was reported to be the second-highest on record.
Smith highlighted that management has cautiously lifted the guidance for the fourth fiscal quarter of 2025, suggesting a potential slowdown in GMV and revenue growth, but also predicting further expansion in operating margins. The analyst found it promising that Affirm is not currently experiencing any weakness related to tariffs.
In conclusion, while maintaining the Overweight rating on Affirm shares, Smith has slightly reduced the target multiple to reflect the prevailing macroeconomic uncertainties. Consequently, the December 2025 price target for Affirm has been revised to $69, down from the previous target of $74. The broader analyst community maintains targets ranging from $45 to $85, with InvestingPro offering additional insights through its extensive financial metrics and 8 more ProTips that can help investors make informed decisions about AFRM’s potential.
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 EPS of $0.01, compared to a forecast of -$0.01. Revenue also slightly exceeded expectations, reaching $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 significant 36% year-over-year growth in Gross Merchandise Volume (GMV), particularly strong in March with a 40% increase. Affirm continues to focus on expanding its 0% APR loan offerings, a strategy driven by merchant requests for promotional support. JMP Securities recently lowered its price target for Affirm from $85.00 to $75.00, citing a recalibration of market multiples and maintaining a Market Outperform rating. Affirm’s management remains optimistic, emphasizing stable credit metrics and increased guidance for the fiscal fourth quarter.
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