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On Friday, Mizuho (NYSE:MFG) Securities adjusted its price target for Affirm Holdings Inc. (NASDAQ: NASDAQ:AFRM) shares, reducing it from $84 to $70, while continuing to endorse the stock with an Outperform rating. Currently trading at $54.26, Affirm’s stock remains within analysts’ target range of $45-$85, with InvestingPro data showing significant price volatility. The revision follows a market pattern where third-party data and collective investor behavior led to a decline in Affirm’s stock value post-market, despite the company reporting robust overall results.
The firm’s analysts were particularly encouraged by Affirm’s significant growth in 0% Annual Percentage Rate (APR) loans, noting their popularity among both consumers and merchants. This strategy appears to be paying off, with revenue growing 46.27% year-over-year and reaching $2.8 billion in the last twelve months. This type of loan product appears to be a key factor in the company’s appeal and could be driving its positive performance.
Mizuho’s proprietary analysis, titled "Is Affirm Counter-Cyclical?", echoes the sentiments shared by Affirm’s management regarding the company’s resilience during economic downturns. The analysis suggests that lower interest rates could potentially counterbalance or even surpass any negative effects from broader macroeconomic challenges.
The decision to lower the price target was influenced by the current market multiples and the extension of Mizuho’s financial projections for Affirm to the 2027 fiscal year. Despite the reduction in the price target, Mizuho’s outlook on Affirm remains optimistic, with the belief that the company is well-positioned to navigate through potential economic headwinds.
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. Revenue slightly exceeded expectations, totaling $783.14 million against a forecast of $781.74 million. The company experienced a robust 36% year-over-year growth in Gross Merchandise Volume (GMV). Despite these positive earnings, Affirm’s stock saw a decline in aftermarket trading. Affirm management has increased its guidance for all fiscal fourth-quarter metrics, which ends in June. JMP Securities analyst David Scharf revised the price target for Affirm shares, lowering it from $85.00 to $75.00, while maintaining a Market Outperform rating. Additionally, JPMorgan analyst Reginald Smith adjusted the price target for Affirm shares to $69 from $74, maintaining an Overweight rating. Both analysts cited macroeconomic uncertainties and market conditions as reasons for their adjustments.
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