Affirm Holdings: Resilient in the Face of Competitive Pressures, Maintains Strong Buy Rating

In a report released yesterday, Jason Kupferberg from Bank of America Securities maintained a Buy rating on Affirm Holdings (AFRM – Research Report), with a price target of $76.00.

Jason Kupferberg has given his Buy rating due to a combination of factors that suggest Affirm Holdings remains a strong player in the Buy Now, Pay Later (BNPL) market despite recent competitive pressures. The announcement of a competitor being selected by Walmart’s OnePay to offer installment loan financing has led to a decline in Affirm’s stock price. However, Kupferberg believes this reaction is exaggerated, as the impact on Affirm’s gross merchandise volume (GMV) and adjusted operating income from Walmart is relatively minor, representing only a small portion of their overall business.
Furthermore, while OnePay has captured some of Walmart’s BNPL volumes, it hasn’t significantly hindered Affirm’s growth. Kupferberg anticipates that even if Walmart shifts more BNPL volume to OnePay, Affirm could potentially recover some of the lost business through its other offerings like the Affirm Card or app. Additionally, Kupferberg sees Affirm as a long-term beneficiary in the expanding BNPL sector, which is expected to continue gaining traction in eCommerce. Despite the competitive landscape, the overall impact on Affirm is considered manageable, supporting the Buy rating.