Affirm (AFRM) Shares Explode Over 30% on Raised Guidance, Analyst Remains Bullish

Shares of Affirm Holdings (NASDAQ: AFRM) are up more than 30% in premarket trading Friday after the company hiked its FY revenue forecast.

The fintech company reported a Q3 loss per share of 19c, compared to a loss per share of $1.06 in the same period last year. Revenue came in at $354.8 million in the quarter, up 54% YoY and above the consensus estimates of $344.3 million. The company reported a gross merchandise volume of $3.9 billion, while analysts were projecting $3.86 billion.

For the fourth quarter, AFRM expects revenue in the range of $345 million to $355 million, compared to the analyst consensus of $353.1 million. The company anticipates a gross merchandise volume in the range of $3.95 billion to $4.05 billion, compared to the analyst estimates of $3.95 billion.

Looking ahead to the full fiscal year performance, Affirm expects FY revenue in the range of $1.33 billion to $1.34 billion, up from the previous forecast of $1.31 billion, while analysts were expecting $1.33 billion.

Gross merchandise value for the full year is expected in the range of $15.04 billion to $15.14 billion, up from the previous guidance of $14.78 billion, and compared to the expected $15 billion.

Affirm said it agreed to a multi-year extension of its deals with Shopify in the U.S, making the fintech company the exclusive pay-over-time provider for Shop Pay Installments.

“We plan to achieve a sustained profitability run rate on an adjusted operating income basis by July 1, 2023,” the company said.

BofA analyst Jason Kupferberg reiterated a Buy rating and a $77.00 per share price target on AFRM stock.

“After a major pullback in shares, AFRM’s F3Q print was a sight for sore eyes along multiple dimensions and should be well-received… We continue to see credit (where performance beat internal plan in F3Q) as manageable, while AFRM remains differentiated in the Buy Now Pay Later (BNPL) market,” the analyst said in a client note.

Truist Securities analyst Andrew W. Jeffrey also reiterated a Buy rating and said Affirm is doing a better job than competitors on BNPL. As such, the company is well-positioned to capture a significant share of the US consumer debit market.

By Senad Karaahmetovic

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