AFRM - Affirm: This BNPL Play Is Not A Bargain

2024-06-25 05:31:02 ET

Summary

• Affirm is a leading Buy Now, Pay Later company benefiting from growing product adoption and revenue growth.
• Despite not being profitable yet, Affirm has long-term potential with a moderate risk profile for investors.
• Affirm's valuation appears high when compared to other Fintech companies like Block and PayPal.
• Operating income and GAAP profitability would be inflection points and could trigger a rating upgrade.

Affirm ( AFRM ) focuses on offering customers tailored, short-term financing solutions with a high degree of transparency. The Fintech is a leading Buy Now, Pay Later (BNPL) company in the industry and benefits from growing product adoption, especially in the Millennial and Gen Z customer cohorts, and is seeing strong revenue and transaction per account growth as a result. Although Affirm is not yet profitable on either an operating income or net income basis, I believe the Fintech has long-term potential. Shares are not especially cheap, however, and since the Federal Reserve recently walked back earlier comments of up to three rate cuts in FY 2024, I believe Affirm is a solid hold here!...

For further details see: