Affirm Holdings Receives Upgrade from Needham
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2d ago
0mins
Source: seekingalpha
- Bank Charter Application: Affirm Holdings has submitted an application for a limited bank charter, which is expected to provide access to deposit funding for loans, reduce third-party risk by bringing several products in-house, and could serve as a pivotal growth catalyst for the company.
- Stock Price Increase: Following the upgrade, Affirm's stock rose 3.48% in pre-market trading to $71.10, reflecting optimistic market expectations regarding the company's future growth potential.
- Rating Upgrade: Needham upgraded Affirm's rating from Hold to Buy with a price target of $100, demonstrating confidence in the company's medium-term growth and profitability outlook, aligning with the consensus among market analysts.
- Increased Market Confidence: While Seeking Alpha's Quantrating system rates the stock as Hold, the overall market sentiment towards Affirm is increasingly positive, indicating investor recognition of its competitive advantages and growth potential in the fintech sector.
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Analyst Views on AFRM
Wall Street analysts forecast AFRM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AFRM is 95.50 USD with a low forecast of 83.00 USD and a high forecast of 114.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
18 Analyst Rating
12 Buy
6 Hold
0 Sell
Moderate Buy
Current: 65.360
Low
83.00
Averages
95.50
High
114.00
Current: 65.360
Low
83.00
Averages
95.50
High
114.00
About AFRM
Affirm Holdings, Inc. provides consumers with an alternative to traditional payment options. The Company is engaged in building a payment network. Its platform comprises three core elements: point-of-sale payment solutions for consumers, merchant commerce solutions, and a consumer-focused app. Its Affirm App and Website provide tailored offers from merchants based on consumers' preferences. Consumers can apply at affirm.com or via the Affirm App and, upon approval, receive a single-use virtual card to use online or in-store. Its Affirm Card allows consumers to link a bank account to pay in full, or apply to pay overtime through the Affirm App. It offers users an in-app post-purchase feature that allows them to instantly apply to convert any eligible debit transaction into an installment loan. Through the Affirm app and in partnership with Cross River Bank, it offers a savings account, with no minimum deposit requirements or fees.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Affirm's Bank Charter Application to Drive Long-Term Growth
- Bank Charter Application: Affirm's application for a bank charter is expected to be a significant long-term growth driver, enhancing the company's competitive position in the market according to analysts.
- Rating Upgrade: Needham upgraded Affirm's rating from hold to buy, setting a $100 price target that indicates a 46% upside, reflecting confidence in the company's future performance.
- Lower Funding Costs: By obtaining a bank charter, Affirm will gain access to deposit funding, thereby reducing funding costs and reliance on third parties, which enhances growth and product development potential.
- Product Integration Benefits: Owning a bank will allow Affirm to internalize existing products like the Affirm Money Account and Affirm Card, reducing friction for users and improving unit economics, which is expected to accelerate product launches further.
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Stock Outlook for Lemonade and Affirm: Key Insights
- Lemonade Price Surge: In 2025, Lemonade's stock skyrocketed by 94% to $91.79, yet the company remains unprofitable and faces fierce competition, raising doubts about its future growth potential.
- Affirm's Strong Financials: In Q1 of fiscal 2026, Affirm reported a 34% year-over-year revenue increase to $81 million, achieving net income of $81 million, demonstrating its successful transition to profitability.
- Shifting Market Sentiment: As Lemonade's valuation has soared, investor optimism has waned, prompting a shift in focus towards emerging financial stocks like Affirm that show potential for growth.
- Impact of Bank Charter: Affirm's application to become an industrial loan bank allows it to accept deposits and make loans directly, expected to reduce costs and enhance profitability, leading analysts to maintain a bullish outlook on its future performance.
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