BTIG notes elevated delinquencies in Affirm ABS vintages

Investing.com - BTIG Research reports that July delinquency trends show elevated early-stage delinquencies across Affirm Holdings Inc (NASDAQ: AFRM) stock's static pool asset-backed securities.

The 30-59 day delinquencies for each curve are at all-time highs for the newest vintages, according to BTIG. At 9 months of age, the 2025-X2 delinquencies are higher than any prior vintage early-stage delinquencies.

The same pattern holds true for the 2025-X2 vintage at 16 months of age, BTIG notes.

BTIG points out that Affirm has guided for revenue less transaction costs margins to compress from their current level above 4.0%. One way to achieve this compression is to loosen underwriting, which would naturally raise losses.

The higher loss rate would allow Affirm to approve more loans and increase gross merchandise volume. BTIG states it may be appropriate for delinquencies to increase as long as the RLTC margin remains within 3.75%-4.00% and GMV accelerates.

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