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On Tuesday, TD Cowen initiated coverage on Affirm Holdings Inc. (NASDAQ: NASDAQ:AFRM) with a Buy rating and set a price target of $50.00. According to InvestingPro data, analyst price targets for Affirm range from $45 to $85, with the stock currently trading at $37.57. The firm highlighted Affirm as one of the top performing Buy Now, Pay Later (BNPL) brands in the United States, featuring a comprehensive point-of-sale lending capability that distinguishes it from its peers. The analysts noted Affirm's consumer-friendly practices as a key advantage in the industry. The company maintains strong financial flexibility with a current ratio of 12.29, indicating robust liquidity to meet short-term obligations.
Affirm's seasoned underwriting experience was also underscored by TD Cowen, pointing out that the company's origins in longer-term loans provided it with a robust foundation prior to expanding into pay-in-4 services. The analysts believe this background contributes to Affirm's strong position in the market.
The firm also commended Affirm's impressive roster of e-commerce partners, including giants like Amazon (NASDAQ:AMZN) and Shopify (NASDAQ:SHOP). This network of partnerships, according to TD Cowen, not only showcases Affirm's capabilities but also enables the company to effectively target a broad range of customers, from large to small businesses, more efficiently than its BNPL competitors. These partnerships have contributed to impressive revenue growth of 46.27% over the last twelve months.
TD Cowen expressed confidence in Affirm's Gross Merchandise Volume (GMV) growth guidance, anticipating it to be in the low-20s-plus range in the medium term, with potential to accelerate. The firm's analysis suggests that Affirm's strategic advantages and partnerships are likely to support its growth trajectory and market position. InvestingPro analysis reveals multiple additional insights about Affirm's financial health and market position, with over 10 exclusive ProTips available for subscribers, including detailed volatility metrics and profitability forecasts.
In other recent news, Affirm Holdings Inc. has been the focus of several significant developments. Stride Bank has partnered with Affirm to issue the Affirm Card, allowing consumers flexible payment options through the Affirm app. This partnership is anticipated to expand the card's reach, aligning with Affirm's goal to provide transparent financial products. Affirm's strategic collaborations continue with an expanded agreement with J.P. Morgan Payments, integrating Affirm's payment options into J.P. Morgan's Commerce Platform for U.S. merchants. This move follows Affirm's recent partnership with Adyen (AS:ADYEN), enhancing its presence in the U.K. market.
Analyst firms have shown varied support for Affirm, with Citizens JMP maintaining a Market Outperform rating and setting a price target of $85, citing Affirm's potential to scale operations. Goldman Sachs also reiterated a Buy rating with a $56 price target, emphasizing Affirm's strategic partnerships as a key factor in its distribution strategy. Meanwhile, William Blair reaffirmed an Outperform rating, expressing confidence in Affirm's leadership in the buy-now-pay-later sector despite investor concerns about competition from Klarna. These developments highlight Affirm's ongoing efforts to expand its market presence and strengthen its financial ecosystem.
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