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SAN FRANCISCO - Affirm Holdings Inc. (NASDAQ: AFRM), a rapidly growing fintech company with over $3 billion in annual revenue and 42% year-over-year growth, has entered into a multi-year agreement with Costco Wholesale Corporation (NASDAQ: COST) to offer pay-over-time options for customers on Costco’s U.S. website. According to InvestingPro data, Affirm maintains a strong financial position with liquid assets significantly exceeding short-term obligations. Starting today, Costco members can select Affirm’s financing at checkout for online purchases between $500 and $17,500 without incurring late or hidden fees.
This partnership arrives as consumers gear up for summer, often investing in seasonal goods such as outdoor furniture and appliances. Affirm’s Senior Vice President of Revenue, Pat Suh, highlighted the benefit of this option for Costco members who are accustomed to buying in bulk and planning their finances. InvestingPro analysis reveals that while Affirm’s stock has shown significant volatility, the company maintains a healthy current ratio of 13.47, indicating strong ability to meet short-term obligations.
The service is designed to provide transparent pricing and credit offers, including APR discounts. Customers can quickly check their eligibility online and receive immediate confirmation to proceed with their purchase using Affirm’s monthly payment plans.
Affirm’s approach to financing contrasts with traditional credit options by eliminating late and hidden fees, aligning with their mission to offer honest financial products. This collaboration with Costco, one of the world’s largest retailers, marks a significant extension of Affirm’s reach into the retail sector.
The availability of Affirm’s payment options is subject to eligibility and is provided by their lending partners, as detailed on their website. This initiative is based on a press release statement and aims to offer Costco members a flexible way to manage spending on significant purchases. With a market capitalization of $17.4 billion, Affirm’s current valuation appears to be trading above its Fair Value according to InvestingPro analysis, which offers comprehensive financial health scores and additional insights through its Pro Research Reports covering over 1,400 US stocks.
In other recent news, Affirm Holdings Inc. has been active with several strategic developments. The company reported its third-quarter fiscal year 2025 results, which were slightly below some investor expectations, yet aligned with Wall Street’s projections. Forward guidance for the fourth quarter anticipates a 4% increase in Gross Merchandise Volume and a 3% rise in Revenue Less Transaction Costs. Affirm has also announced partnerships with Mattress Firm and World Market to offer flexible payment options to their customers, expanding its network of retail partners. These collaborations aim to enhance customer experiences by providing transparent payment solutions without hidden fees.
In terms of analyst activity, Wells Fargo maintained an Overweight rating on Affirm, with a price target of $67, citing strong revenue prospects and stable credit performance. BMO Capital Markets raised its price target from $62 to $64, highlighting Affirm’s strong execution against market expectations. Meanwhile, Mizuho Securities reduced its price target from $84 to $70, though it maintained an Outperform rating, noting the popularity of Affirm’s 0% APR loans. Despite the price target adjustment, Mizuho remains optimistic about Affirm’s ability to withstand economic challenges.
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