Affirm Holdings Updates 2 Risk Factors

Affirm Holdings, Inc. (AFRM) recently delivered a mixed set of results for the first quarter of fiscal 2022. Driven by gross merchandise volume and interest income, its top-line surged 55% during this period.

Additionally, Affirm has expanded its relationship with Amazon and will support all transactions above the $50 ticket size.  Keeping these developments in mind, let us take a look at the changes in Affirm’s key risk factors that investors should know.

Risk Factors

According to the TipRanks Risk Factors tool, Affirm’s top risk category is Finance & Corporate, accounting for 41% of the total 68 risks identified. In the recent quarterly report, the company has updated two key risk factors.

Under the Finance & Corporate risk category, Affirm noted that it may issue Class A common stock, or securities convertible into shares of its Class A common stock. The move is meant for transactions such as an acquisition, financing, investment, or under any equity incentive plans. Such a move can result in dilution of ownership for existing investors and adversely impact the company’s share price.

Similarly, under the Ability to Sell risk category, Affirm highlighted that if it is not able to attract additional merchant partners, retain existing partners and develop relationships with new and existing partners, then its business, financials and future prospects may see an adverse impact along with the company’s common shares. (See Insiders’ Hot Stocks on TipRanks)

Compared to a sector average of 14%, Affirm’s Ability to Sell risk factor at 19%.

Wall Street’s Take

Consensus on the Street is a Moderate Buy based on 7 Buys, 4 Holds, and 1 Sell. The average Affirm Holdings price target of $170.09 implies a potential upside of 24.92% for the stock. Shares are up 40% so far this year.

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