Compass Point Upgrades Affirm Holdings Inc. (AFRM) to Neutral

Compass Point analyst Giuliano Bologna upgraded Affirm Holdings Inc. (NASDAQ: AFRM) from Sell to Neutral with a price target of $61.00 (from $20.00).

The analyst comments "We are updating our model/thesis and upgrading Affirm Holdings (AFRM) to Neutral with a $61 price target (from $20) based on 3.0x our YE26E TBV per share of $20.32. In our previous valuation, we had underappreciated AFRM's ability to re-accelerate growth, maintain elevated growth that has compounding benefits as the company benefits from very strong operating leverage. We model AFRM's Adj. operating income margin increasing to 30% in FY27E compared to our 24.0% estimate for FY25E driven by significant sales and marketing expense leverage as AFRM continues to benefit from past marketing expenses driving recurring member engagement and avg. transactions per member. The flywheel benefit of multiple quarters of higher growth and the potential to continue that trend in the near-term should drive material expense leverage and push AFRM towards GAAP profitability in FY25, potentially as soon as 3Q25. At the same time, AFRM has secured significant incremental funding capacity to support forward growth and has also been able to manage credit performance better than peers over the last few years despite higher growth rates. In the near-term, AFRM's strong performance should continue to support shares and outperformance could drive incremental upside optionality assuming the company can continue to execute in the near-term."

For an analyst ratings summary and ratings history on Affirm Holdings Inc. click here. For more ratings news on Affirm Holdings Inc. click here.

Shares of Affirm Holdings Inc. closed at $55.17 yesterday.

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