Should You Buy Affirm Stock While It's Below $49?

Core Viewpoint - Affirm is considered an undervalued growth opportunity despite facing macroeconomic and competitive challenges, with its stock currently trading below its IPO price [1] Group 1: Company Growth Metrics - Affirm's BNPL platform has seen significant growth in active merchants, active consumers, transactions per active consumer, GMV, and revenue from FY 2021 to FY 2022, driven by pandemic-related online shopping and stimulus checks [2][4] - In FY 2023, growth slowed significantly across all metrics due to inflation impacting consumer spending, with active merchants growing only 8% and revenue growth dropping to 18% [4][5] - However, in FY 2024, Affirm's growth metrics began to recover, with GMV and revenue growth accelerating again, driven by new merchant deals and the adoption of the Affirm Card [5] Group 2: Financial Performance - Affirm's operating margin improved significantly in FY 2024, narrowing losses to $518 million compared to $985 million in FY 2023, with expectations of turning positive by Q4 FY 2025 [7] - The company has maintained low delinquency rates on its loans, with only 2.4% of monthly installment loans delinquent by over 30 days at the end of FY 2024, indicating a healthy loan portfolio [8] Group 3: Market Position and Future Outlook - Analysts project Affirm's revenue to grow by 29% in FY 2025, with a compound annual growth rate (CAGR) of 24% expected from FY 2024 to FY 2027, suggesting a strong future outlook [5] - Affirm's enterprise value is currently $18.6 billion, which is considered reasonable relative to its growth prospects, especially compared to its previous high valuation of 37 times forward sales [5]