Consumer SpendingThe biggest risk to our call is lower discretionary spending among lower to middle-income consumers, which we believe are the bulk of AFRM’s base.
Regulatory RiskThe CFPB’s intention to subject BNPL firms to the same supervisory examination as banks and credit unions poses a potential threat, increasing regulatory scrutiny and potentially hindering Affirm’s growth.
Valuation ConcernsTrading at 81x our FY26 GAAP EPS estimate (untaxed) and 32x our FY27 GAAP EPS estimate (untaxed), AFRM is considered substantially overvalued.