Affirm Stock Soars as Buy-Now-Pay-Later Fintech Beats Forecasts

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•  29 Aug 2025
 

The Buy-Now-Pay-Later Fintech Company Beats Forecasts - What Do Analysts Say?

Buy-now-pay-later fintech company Affirm (3.09%), which operates in the buy-now-pay-later space, posted a sharp 18% increase in after-hours trading, on the back of excellent quarterly results. Revenue climbed 33% to $876 million, significantly higher than analysts' expectations of just $837 million. The company surprised with a profit of 20 cents per share - a sharp jump from a loss of 14 cents in the same period last year.

The company's key metric, gross merchandise volume (GMV), which represents the total transactions on the platform minus refunds, jumped 43% to $10.4 billion - an all-time high. The figure also represents a sequential improvement from the previous quarter’s $8.6 billion. Chief Operating Officer Michael Linford noted that this was the largest quarter in terms of GMV in the company’s history. In addition, the company achieved its first operating profit since going public – a critical milestone in its development.

Optimistic projections for next year – Apiram expect at least $46 billion in trading volume for fiscal 2026, and revenue in the range of $855-885 million in the current quarter. Linford clarified that the company intentionally sets a conservative lower limit, with the expectation being to actually exceed it. Management takes its commitments to investors very seriously and adheres to realistic goals.

Impact of separation from Walmart and strategy going forward – The termination of the partnership with retail giant Walmart in March is expected to have a minor impact on future performance. Transactions through Walmart accounted for just 5% of total trading volume and 2% of adjusted operating profit, according to a report filed with the U.S. Securities and Exchange Commission. The company expects Klarna, a Swedish competitor in deferred payments, to replace it on Walmart's platform in the second quarter.

However, Linford emphasized that Apiram will continue to serve customers directly through its direct channel, including those who buy from merchants not directly integrated into the platform. Management is confident that it can compensate for a significant part of the expected damage by deepening its activities with end consumers.

Analyst and market reaction - Jefferies maintained a strong buy recommendation and a price target of $95 per share, noting another strong quarter with guidance that is likely to satisfy investors. But the stock is already trading at $94 (after an 18% post-market gain). Analysts have highlighted exceptionally solid credit performance and a significant improvement in margins, driven in part by a surge in 0% interest products that attract quality customers with high product scores. There has also been an impressive acceleration in the number of active users and new traders joining the platform.

Most analysts covering the stock recommend a buy, and none recommend a sell. The stock has registered a cumulative increase of 31% since the beginning of the year, supported by successive upgrades and optimistic assessments from leading Wall Street analysts. The strong performance is particularly notable against the backdrop of mixed results from competitors such as Block and PayPal, whose reports disappointed investors despite relatively reasonable figures. Wall Street is no longer satisfied with reasonable figures; it wants companies to beat forecasts, the article asserted in a big way.

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