2023-08-25 23:02:20
The share price of financial technology start-up Affirm soared nearly 29% on Friday (25th), because the “buy now, pay later” company’s fiscal fourth-quarter results exceeded expectations and its first-quarter financial forecast was optimistic.
Affirm (AFRM-US) soared $3.98, or 28.82%, to close at $17.79 a share on Friday, before rising less than 1% following hours.
F24Q1 key figures vs. Wall Street expectations (Refinitiv poll consensus) Revenue: $430 million to $455 million vs. $430 million F23Q4 key figures vs. Wall Street estimates Loss per share: 69 cents vs. 85 cents (Refinitiv GMV: $5.5 billion vs. $5.3 billion (StreetAccount consensus)
GMV is a closely watched metric in the industry, measuring the total value of deals over a period of time.
Affirm reported a net loss of $206 million, or 69 cents a share, in the fourth quarter, compared with a net loss of $186.4 million, or 65 cents a share, a year earlier.
The number of buy-now-pay-later (BNPL) services like Affirm has skyrocketed during the pandemic as online shopping has taken off, but Affirm has been battling a deteriorating economic environment and rapidly rising interest rates.
“We delivered strong credit performance, unit economics and GMV growth in a high interest rate environment despite significant changes in interest rates and consumer demand,” Affirm Chief Financial Officer Michael Linford said in a statement.
Affirm admitted frankly in its financial report that the restart of student loans in October will “pose moderate pressure” on its GMV in fiscal year 2024.
Deutsche Bank analysts raised their target price from $12 to $16 and reiterated an “overweight” rating on the stock, optimistic regarding the growth of the company’s debit card Affirm Card. But Affirm was trading above $17 on Friday.
“While the future of Affirm’s model remains uncertain over the next few years amidst macroeconomic dark clouds, the company continues to deliver differentiated credit performance, and if Affirm Card lives up to expectations, we will I think there is still room for potential upside in the data.”
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