BofA update shows where active managers are putting money
Investing.com - Needham maintained its Hold rating on Affirm Holdings Inc. (NASDAQ:AFRM) following the company’s fourth-quarter fiscal 2025 results that exceeded analyst expectations. The company has demonstrated remarkable momentum, with revenue growing 38.8% and the stock delivering a 92% return over the past year.
The buy-now-pay-later provider delivered better-than-anticipated performance on both revenue and earnings metrics, prompting Needham to raise its estimates for the company despite maintaining its cautious investment stance. According to InvestingPro, Affirm maintains a strong liquidity position with a current ratio of 8.25, indicating robust financial health.
Affirm’s management provided what Needham described as a "solid outlook" even while assuming that Walmart will transition to another BNPL provider by the second quarter of fiscal 2026, which the firm believes "takes significant risk out of the GMV/revenue guide."
Credit performance at Affirm remains strong, with Needham noting that the macroeconomic environment continues to be favorable while the company’s underwriting practices are holding up well despite rapid business growth.
Despite acknowledging Affirm’s impressive execution, Needham justified its Hold rating based on valuation concerns, pointing out that the stock was expected to open at a fiscal 2027 GAAP P/E multiple of approximately 73x following after-hours trading gains, which represents "a substantial premium to peers." This aligns with InvestingPro analysis showing the stock is currently overvalued, trading at a high Price/Book multiple of 8.41 and near its 52-week high of $82.53.
In other recent news, Affirm Holdings Inc. reported impressive financial results for the fourth quarter of fiscal year 2025. The company delivered earnings per share of $0.20, significantly exceeding analysts’ expectations of $0.12. Revenue also outperformed projections, reaching $876.42 million against a forecast of $834.35 million. This strong performance was attributed to strategic innovations and robust consumer demand. Additionally, Affirm’s Gross Merchandise Volume (GMV) grew by 43%, an acceleration from the 36% growth observed in the previous quarter. Following these results, Citizens JMP raised its price target for Affirm to $105 from $75, maintaining a Market Outperform rating. These developments highlight Affirm’s solid growth trajectory and positive market sentiment.
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