2024-06-23 11:00:00 ET
Summary
- AAPL's exit from the BNPL scene provides massive opportunities for other fintech lenders, such as AFRM and other credit/ debit card providers.
- AAPL users may be more likely to adopt AFRM's BNPL platform ahead, with it potentially influencing "customer decisions on which cards to spend on, or where to set up credit."
- With AAPL's users typically reporting higher incomes, we may see AFRM benefit from the reduced lending risks and delinquency rates, building upon the latter's risk management thus far.
- Therefore, while the AFRM management "does not expect this partnership to have a material impact in fiscal year 2025," we believe that this guidance has been overly prudent.
- With AFRM still reporting robust double digit growths and the consensus quietly upgrading their forward estimates, we believe that the stock remains a compelling Buy here.
We previously covered Affirm ( AFRM ) in April 2024, discussing why we had upgraded the stock to a Buy, thanks to the improved margin of safety from the stock's pullback. This was on top of the fintech's profitable operating margins and the management's promising FY2024 guidance....
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Affirm: Apple's Exit From Pay Later May Be A Growth Driver