Affirm Holdings: Buy, Sell, or Hold?

: AFRM | Affirm Holdings Inc. Cl A News, Ratings, and Charts

AFRM – Despite posting a stable earnings report in the last quarter, the shares of Fintech company Affirm Holdings (AFRM) are down 76.4% in price year-to-date. So, let’s evaluate if it is worth betting on the stock now.

Affirm Holdings, Inc. (AFRM) in San Francisco is a digital and mobile-first commerce platform in the United States and Canada. Its platform includes a POS payment solution for customers, merchant commerce solutions, and a consumer-focused app. The company recently announced a multi-year renewal of its partnership with Shopify (SHOP), a provider of key internet infrastructure for commerce in the United States. The arrangement establishes AFRM as the exclusive pay-over-time supplier for Shop Pay Installments in the United States.

However, the stock is down 50.9% in price over the past year and 38.3% over the past month to close its last trading session at $23.71. In addition, the stock is currently trading 86.6% below its 52-week high of $176.65.

Also, AFRM was downgraded by equities research analysts at Stephens to an “underweight” rating from an “equal weight” rating in a research note issued last week

Here is what could shape AFRM’s performance in the near term:

Poor Bottom-line Performance

AFRM’s total revenue increased 53.8% year-over-year to $354.76 million for the three months ended March 31, 2022. Its active consumers grew 137% from its year-ago value to $12.7 million sequentially from Dec. 31, 2021.

However, its costs and expenses increased 32.1% from its year-ago value to $581.31 million. Its operating loss rose 8.2% from the prior-year quarter to $226.51 million. And the company’s net loss was $54.67 million. Its loss per share amounted to $0.19 over this period.

Poor Profitability

AFRM’s 0.21% trailing-12-months asset turnover ratio  is 66.7% lower than the 0.63% industry average. Its trailing-12-months cash from operations stood at negative $123 million versus the $85.32 million industry average. Also, its trailing-12-months ROA, net income margin, and ROC are negative 9.02%, 50.9%, and 9.1%, respectively.

Unfavorable Earnings Estimates

Analysts expect AFRM’s EPS to remain negative in the current quarter and next quarter. In addition, its EPS is expected to decline at a 35.1% rate per annum over the next five years.

POWR Ratings Reflect Bleak Outlook

AFRM has an overall F rating, which equates to a Strong Sell in our proprietary POWR Ratings system. The POWR ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. AFRM has an F grade for Quality, which is justified given the company’s poor profitability.

Among the 79 stocks in the C-rated Technology – Services industry, AFRM is ranked #77.

Beyond what I have stated above, one can view AFRM ratings for Growth, Value, Stability, Momentum, and Sentiment here.

Bottom Line

While AFRM reported stable top-line growth in its last reported quarter, its near-term bleak growth prospects are concerning. In addition, the stock is currently trading below its 50-day and 200-day moving average of $34.81 and $82.77, respectively, indicating a downtrend. Furthermore, considering its poor profitability and recent analysts’ rating downgrade, we think the stock is best avoided now.

How Does Affirm Holdings Inc. (AFRM) Stack Up Against its Peers?

While AFRM has an overall D rating, one might want to consider its industry peers, Fujitsu Limited (FJTSY), Celestica Inc. (CLS), and Information Services Group Inc. (III), which have an overall A (Strong Buy) rating.

Note that III is one of the few stocks handpicked by our Chief Growth Strategist, Jaimini Desai, currently in the POWR Stocks Under $10 portfolio. Learn more here.

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


AFRM shares were trading at $23.62 per share on Monday morning, down $0.09 (-0.38%). Year-to-date, AFRM has declined -76.51%, versus a -15.79% rise in the benchmark S&P 500 index during the same period.


About the Author: Pragya Pandey


Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
AFRMGet RatingGet RatingGet Rating
FJTSYGet RatingGet RatingGet Rating
CLSGet RatingGet RatingGet Rating
IIIGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Stock Market Alert: History Repeating Itself?

The last time we played around with tariffs was back in 2018 when we started a trade war with China. To say the least that was very negative for stocks as the S&P 500 (SPY) tanked the second half of the year. We need to learn from those history lessons to chart our course for investing in 2025. Read on for more...

3 Renewable Fuel Stocks With Big Potential

The renewable fuel sector is leading the global energy transition, driven by significant government initiatives that have accelerated the adoption of clean energy and fueled remarkable growth in recent years. So, investing in fundamentally stable renewable fuel stocks Vistra Corp. (VST), Duke Energy (DUK), and American Electric Power (AEP) could be a wise move for investors. Read on...

American Airlines (AAL) vs. Alaska Air Group (ALK): Which Airline Stock Is Set to Soar Higher?

The adoption of advanced technology and surging air travel demand are brightening the prospects for the airline industry. To analyze which airline stock is set to soar higher, let’s compare American Airlines Group (AAL) and Alaska Air Group (ALK). Read on to find out…

3 Warren Buffett Stocks That Are Smart Buys Now

Warren Buffett’s investment strategy has stood the test of time, delivering remarkable returns for decades. Currently, his portfolio includes Visa (V), VeriSign (VRSN), and DaVita (DVA) shares, which reflects his confidence in the long-term growth potential of these companies. So, could they be smart buys right now? Read on to find out…

Fade THIS Stock Market Rally

We all cheer when the S&P 500 (SPY) makes new highs as it did last week. Unfortunately the stars are aligning for more market downside in the near term. Get the full story now...

Read More Stories

More Affirm Holdings Inc. Cl A (AFRM) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All AFRM News