Affirm Reports 30% Revenue Growth in Q2
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3d ago
0mins
Should l Buy AFRM?
Source: stocktwits
- Significant Revenue Growth: Affirm's revenue surged 30% year-over-year to $1.12 billion in Q2, exceeding the consensus estimate of $1.06 billion, indicating strong demand for its buy-now-pay-later services.
- Increased Credit Loss Provisions: The company reported a jump in credit loss provisions to $214.2 million in Q2, up from nearly $153 million a year ago, reflecting potential challenges from rising credit risks despite solid overall revenue performance.
- Interest Income Boost: Affirm's interest income grew by 21%, primarily driven by a 22% increase in average net loans held for investment, which supports the company's profitability even amid credit loss pressures.
- Optimistic Future Outlook: Affirm expects Q3 revenue to range between $970 million and $1 billion, with analysts averaging $975.7 million, showcasing confidence in future performance despite a 4% drop in stock price during after-hours trading.
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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: 59.420
Low
83.00
Averages
95.50
High
114.00
Current: 59.420
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.
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- Customer and Merchant Growth: Active customers increased by 23% to 25.8 million, while active merchants rose by 42% to 478,000, showcasing Affirm's competitive edge and appeal in the market, potentially laying the groundwork for future revenue growth.
- Guidance Upgrade: Affirm raised its fiscal year 2026 revenue guidance to between $4.08 billion and $4.14 billion, reflecting confidence in future performance, which may enhance market sentiment towards its stock.
See More
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- Stock Performance: Affirm Holdings' stock declined on Friday despite reporting strong fiscal second-quarter earnings.
- Analyst Opinions: Some analysts believe the market reaction to the earnings report is unjustified.
See More
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- Revenue Growth: The company achieved quarterly revenue of $1.12 billion, exceeding Wall Street's expectation of $1.06 billion, reflecting strong market demand that supports future business expansion.
- Strategic Partnership: Affirm's collaboration with Virgin Media O2 introduces transparent and flexible hardware financing options for O2 customers, enhancing O2's competitiveness in the SIM-free market, which is expected to attract more customers and increase sales.
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See More
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- No Hidden Fees: Affirm's financing options cover mobile phones, headphones, and gaming consoles, ensuring customers are not charged late or hidden fees when repaying their loans, which enhances payment transparency and builds trust with consumers.
- Market Expansion Potential: This partnership allows Virgin Media O2 to expand its offerings in the SIM-free market, adding to its existing portfolio of Pay Monthly Handset Bundles and SIM Only options, thereby increasing its competitive edge in the market.
- Future Development Plans: Flexible payment plans are expected to be available to Virgin Media O2 customers later this summer, pending regulatory approval, which will help improve payment convenience for customers and enhance the company's market influence.
See More
