Affirm stock (AFRM) has whipsawed this year. While the buy now, pay later (BNPL) giant has soared over 61% from its 2026 lows, it is still down 8.6% for the year. The stock hit its 2026 highs last month after a stellar fiscal Q4 2026 earnings report but has since pared almost a quarter of its market capitalization. In my previous article, I noted that AFRM stock had little margin of safety after the stellar rally. With the stock now dropping significantly from those levels, let’s explore whether it is a “buy” now.
www.barchart.comAffirm's Q4 Earnings Were Better-Than-Expecetd
In the June quarter, Affirm’s gross merchandise value (GMV) rose 36% year over year (YoY), marking the 11th consecutive quarter the metric increased by over 30%. Its active consumers rose 21% to 27.8 million, while active merchants on its platform rose 50%. Affirm’s transactions per active customer rose to 7, which is a 20% increase over the previous year.
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The company’s GMV crossed $50 billion last fiscal year, and it expects the metric to be at least $64 billion this year. Affirm’s earnings and guidance were well ahead of Street estimates, and the stock unsurprisingly soared following the conference call.
Loop Capital Initiated Affirm With a “Buy” Rating
Several brokerages raised Affirm’s target price following its earnings last month. Among others, Piper Sandler raised its target price from $103 to $115 while Needham raised its target price by $10 to $100. TD Cowen raised Affirm’s target price to a Street-high $124, implying 82% upside from current levels.
Looking at the recent analyst action, Loop Capital initiated coverage on Affirm earlier this week with a “Buy” rating and a $105 target price. The firm expects Affirm to post sustainable annual revenue and GMV growth of 25%. It pointed to Affirm’s track record of “beats and raises” and said that the stock deserves a premium valuation considering the combination of over 25% revenue growth and adjusted operating margins it brings to the table.
The overall sell-side sentiment towards Affirm is quite bullish, unlike some of the other fintech companies like SoFi (SOFI) and Klarna (KLAR). Of the 37 analysts polled by Barchart, 26 rate Affirm as a “Strong Buy” and 2 as a “Moderate Buy.” The remaining nine analysts rate AFRM as a “Hold,” and its mean target price of $99.48 is over 46% higher than the current levels.
www.barchart.comAffirm Stock Looks Like a Buy Here
Affirm has been a good example of execution and has delivered on revenue growth, while also achieving GAAP profitability. Prudent underwriting has been one of Affirm’s strengths, which has helped it keep delinquencies under control. The company has a strong growth runway ahead as it is still available in less than a third of the top 250 e-commerce sites. Affirm is also increasing its reach in the offline channel where its share is quite low.
The company has been expanding globally and has launched in the U.K. It also launched ShopPay Installments with Shopify (SHOP) in Australia and is gearing up to launch in the next major region. These international expansions would help keep Affirm’s topline growth buoyed over the medium to long term.
While Affirm is a structural growth story, its stock has been quite volatile. I have traded in and out of the stock occasionally and used the recent sell-off to add more shares. I find the stock’s valuations attractive — it trades at a forward price-to-earnings (P/E) multiple of 38.5x, which is reasonable for a company expected to grow its revenue by almost 29% this year while expanding margins. Its bottom line is also expected to grow at a brisk pace, and analysts are modelling fiscal year 2028 earnings per share to rise 53.5% to $2.87.
All said, there are two risks that Affirm investors should watch. The first is a possible rate hike in the U.S., which would raise the company’s borrowing costs. Also, while Affirm has long maintained that its customers are doing fine despite all the macroeconomic turmoil, any deterioration in their financial health is a risk for the company.
On the date of publication, Mohit Oberoi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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