Affirm Stock: Should You Buy the Dip After Walmart Setback?

Core Viewpoint - Affirm Holdings Inc. faces significant stock market volatility following Walmart's decision to partner exclusively with Klarna as its BNPL provider, raising concerns about long-term revenue and market share implications for Affirm [1][3][12] Competitive Landscape - The BNPL market is highly competitive, with major players like Klarna and Afterpay vying for market share alongside Affirm, necessitating strong merchant partnerships and consumer attraction [1][2] - Walmart's exclusive partnership with Klarna underscores the intense competition in the BNPL sector, presenting a notable setback for Affirm [2][3] Market Reaction - Affirm's stock price dropped approximately 12% on the day Walmart announced its partnership with Klarna, reflecting investor concerns about potential revenue loss [3] - The market's reaction may overestimate the long-term damage to Affirm, as the company maintains a diversified merchant network [4] Business Resilience - Affirm boasts a diverse network of over 337,000 active merchants and strategic partnerships with major companies like Shopify, Amazon, and Target, which support continued growth [5][6] - The company is expanding into new markets, including the UK and Canada, and diversifying into various verticals, which mitigates the impact of losing any single partnership [6] Competitive Advantages - Affirm's competitive advantages include a transparent fee structure, advanced machine learning underwriting, and flexible Adaptive Checkout technology, which differentiate it in the BNPL sector [7] - The company's Capital Strategy 2.0 focuses on stable funding and operational efficiency, reinforcing its market position [7] Financial Performance - Affirm's Q2 2025 earnings report showed strong performance, with an EPS of $0.23, exceeding analyst expectations, and a year-over-year revenue growth of 47$69.76, representing a 39.81% upside potential, with a Moderate Buy rating based on 20 analyst ratings [9] Long-Term Outlook - Despite the setback from losing Walmart as a partner, Affirm's inherent strengths and opportunities in the expanding BNPL market suggest resilience and growth potential [12] - The recent stock dip may present a buying opportunity for long-term investors, as Affirm's innovation capacity and established fintech position indicate a positive growth trajectory [13]