Affirm Submits Applications to Establish Affirm Bank
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 23 2026
0mins
Should l Buy AFRM?
Affirm submitted applications to the Nevada Financial Institutions Division and the FDIC to establish Affirm Bank, a proposed Nevada-chartered industrial loan company. The proposed bank subsidiary would enable Affirm to continue scaling responsibly while having an FDIC-insured institution. If approved, the proposed entity would operate as a wholly owned, Nevada-chartered, FDIC-insured bank subsidiary of Affirm, and maintain its own independent governance and internal controls. John Marion has been selected to serve as president of Affirm Bank.
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Analyst Views on AFRM
Wall Street analysts forecast AFRM stock price to rise
22 Analyst Rating
17 Buy
5 Hold
0 Sell
Strong Buy
Current: 45.540
Low
65.00
Averages
87.72
High
107.00
Current: 45.540
Low
65.00
Averages
87.72
High
107.00
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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Financial Performance: The company achieved a gross merchandise volume of $13.8 billion, a 36% increase year-over-year, with revenue climbing 30% to $1.12 billion and net income rising 61% to $130 million.
Market Position and Risks: Despite strong financials, analysts express caution due to potential credit risks and competition from established players like PayPal and Klarna, as well as rising delinquency rates in the credit market.
Investment Outlook: Affirm is seen as a high-risk, high-reward investment, with analysts generally bullish on its growth potential, but investors are advised to be wary of associated risks before investing.
See More
Financial Stocks Struggle, Consumer Finance Takes Major Hit
- Consumer Finance Decline: Year-to-date, consumer finance stocks have plummeted by 21%, with Robinhood, Affirm, and SoFi down 39%, 40%, and 38% respectively, reflecting investor concerns over economic slowdown and rising credit risks, leading to a valuation correction for these previously high-performing stocks in 2025.
- Payment Processor Advantage: Visa and Mastercard, as the largest payment processors in the U.S., account for 76% of credit card transaction volume and 69% of cards in circulation, and due to their lack of credit risk exposure, they maintain stable cash flows during economic downturns, with expectations of double-digit earnings growth in 2026.
- Market Dominance: S&P Global and Moody's control 80% of the credit rating market, and with its strong positions in market intelligence and indexing, S&P Global has historically performed well under various market conditions, with a projected 5% increase in credit issuance in 2026.
- Analyst Optimism: 93% of analysts rate Mastercard and S&P Global as
See More
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- Overall Financial Sector Decline: Financial stocks have dropped approximately 10% year-to-date, with consumer finance stocks suffering the most, down 21%, significantly impacting the entire financial sector.
- Visa and Mastercard's Market Position: As the largest payment processors in the U.S., Visa and Mastercard account for 76% of credit card purchase volume and 69% of all cards in circulation, and their lack of credit risk allows them to perform relatively well during economic downturns.
- Analyst Optimism for Visa and Mastercard: With 93% of analysts rating Mastercard as a 'buy' with a price target of $669, indicating a 34% upside, and 92% rating Visa with a target of $408, also suggesting a 34% potential gain, both companies are viewed favorably.
- S&P Global's Resilient Performance: As a dominant player in the credit ratings market, S&P Global, alongside Moody's, controls 80% of the market share, with a projected 5% increase in credit issuance in 2026, and its status as a Dividend King with 53 consecutive years of dividend increases underscores its financial strength.
See More
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- Strategic Shift: OpenAI has decided to abandon its Instant Checkout feature in favor of developing dedicated apps with retailers, aiming to enhance user experience and give retailers more control over the transaction process to better compete in the e-commerce landscape.
- User Experience Challenges: Analysts noted that OpenAI underestimated the complexities of enabling transactions, leading to errors in the Instant Checkout feature, with only about 30 Shopify merchants participating, highlighting the difficulties in technical implementation.
- Market Response: Walmart's data indicates that conversion rates for products sold directly in ChatGPT are three times lower than those that redirect users to retailer websites for checkout, suggesting that users prefer completing purchases on retailer sites, impacting OpenAI's e-commerce potential.
- Future Outlook: Despite the challenges faced by OpenAI, analysts believe that AI shopping is still in its early stages, with the potential to attract more retailer investments, especially through new apps that enhance the shopping experience.
See More
Lenders Alarmed by Rising Borrower Default Rates
- Rising Default Rates: The increase in borrower default rates has raised significant concerns among lenders, which is expected to negatively impact the stability of the credit market and may lead to tighter lending conditions.
- Market Reaction: As of the afternoon of March 16, 2026, stock prices related to lending institutions have already been affected, reflecting investor anxiety over future credit risks, potentially resulting in higher financing costs.
- Credit Policy Reevaluation: Lenders may need to reassess their credit policies in response to the rising default risks, which could affect borrowers' access to financing and overall market liquidity.
- Economic Uncertainty: The rise in borrower default rates may signal signs of economic slowdown, prompting lenders to closely monitor macroeconomic indicators to formulate appropriate risk management strategies.
See More
Concerns Rise Over Increasing Borrower Default Rates
- Borrower Default Risk: Lenders are increasingly concerned about rising borrower default rates, which could lead to tighter credit conditions and negatively impact overall economic growth.
- AI and Wealth Creation: The debate over whether AI can create the world's first trillionaire is intensifying, attracting investor interest while cautioning against potential technology bubbles.
- Unique Company Report: A new report highlights a company dubbed an 'Indispensable Monopoly' that provides critical technology needed by Nvidia and Intel, potentially reshaping market dynamics and enhancing the competitiveness of these firms.
- Investment Recommendations: While The Motley Fool's analyst team has identified 10 stocks with high return potential, Affirm was not included, prompting investors to carefully assess its future performance against market trends.
See More
