Based on the provided data and recent market developments, here's a comprehensive analysis of AFRM's valuation:
Technical Analysis
Valuation Analysis
AFRM is showing signs of being overvalued based on several key metrics. The stock's Price-to-Sales (P/S) ratio has increased significantly to 7.86x in Q2 2025, up from 5.57x in Q1 2025, indicating an expanding valuation multiple that's well above historical averages.
Financial Performance
Despite strong revenue growth of 46% year-over-year to $741 million in Q2 2025, and achieving its first profitable quarter with net income of $80.36 million, the current valuation appears stretched relative to fundamentals.
Analyst Sentiment
Recent analyst actions suggest mixed views, with price targets ranging from $55 to $85. While some analysts have upgraded their targets, the current trading price of $75.22 has already surpassed the average analyst target of $72.47, suggesting limited upside potential.
Conclusion
AFRM appears overvalued at current levels due to its elevated P/S ratio, stretched technical indicators, and price exceeding average analyst targets, despite improving fundamentals.