UPDATE: Stephens Upgrades Affirm Holdings Inc. (AFRM) to Equal Weight
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Stephens analyst Vincent Caintic upgraded Affirm Holdings Inc. (NASDAQ: AFRM) from Underweight to Equal Weight, PT $72.00.
The analyst comments "With AFRM now between our $72 target (unchanged) and our bear-case of $32, we upgrade shares to Equal-Weight/Vol. from Underweight/Vol on valuation. AFRM now trades under 16x our "normalized" F2023E EPS (normalized margins on our revenue estimates), below American Express's P/E. We still think there are risks to our estimates, especially on credit losses and funding costs. But as we've previously written, we'd be long into the upcoming F2Q22 earnings print because we expect a GMV guidance lift from adding Amazon and Shopify to existing guidance. Our F2Q22E is above consensus by 16% for GMV (including Amazon) and revenues by 11%; we think consensus doesn't yet include Amazon. Nevertheless, we still remain cautious on the Buy Now Pay Later space broadly. Bullish views on BNPL still lean on payments share growth, without acknowledging the lending/balance sheet risks of the business. We'll continue to monitor valuations for overbought situations."
Shares of Affirm Holdings Inc. closed at $57.63 yesterday.
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