Morgan Stanley analyst James Faucette maintained a Hold rating on Affirm Holdings (AFRM – Research Report) on February 21 and set a price target of $65.00.
James Faucette’s rating is based on a combination of factors concerning Affirm Holdings’ strategic priorities and market position. Affirm is focused on expanding its distribution, enhancing product integration, and venturing into new geographical markets, which are seen as key to driving growth. The company’s efforts to increase transaction frequency through the Affirm Card have shown promise, with power users significantly increasing their usage. However, there is an acknowledgment of potential average order value compression as frequency rises, which poses a challenge.
Moreover, despite Affirm’s strong partnerships with major e-commerce platforms like Amazon and Shopify, there is still substantial room for growth, given the company’s current share of these partners’ gross merchandise value. These factors, coupled with the current favorable funding and credit environment, contribute to a Hold rating, as the firm navigates both opportunities and risks in its expansion efforts.