Is Affirm Stock Buy Now, Profit Later or Buy Now, Pay Later?

Core Insights - Affirm Holdings is a significant player in the "Buy Now, Pay Later" (BNPL) market, recently achieving a quarterly GAAP net income, indicating a return to profitability [1][14] - The company reported a 36% year-over-year increase in Gross Merchandise Volume (GMV) to $8.6 billion and a corresponding revenue growth of 36% to $783.1 million in Q3 of fiscal year 2025 [2][3] - Affirm's user base has expanded to 21.9 million active consumers, reflecting a 23% year-over-year increase [3] Financial Performance - The Affirm Card has shown remarkable growth, contributing $807 million in GMV, a 115% increase year-over-year, with around 2 million active cardholders [4] - User engagement is increasing, with transactions per active consumer rising 19% to 5.6, and repeat customers making up 94% of transactions [5] - The company achieved a GAAP net income of $2.8 million in Q3, and its Revenue Less Transaction Costs (RLTC) grew 53% year-over-year to $352.6 million [6] Strategic Initiatives - Affirm has extended its partnership with Shopify through June 2028, with plans for a global rollout, including a beta in Canada and future plans for the UK [7] - The addition of Costco.com to its merchant network enhances its market presence, complementing existing relationships with major retailers like Amazon and Target [7] - Affirm's 0% APR monthly installment products accounted for 13% of total GMV in Q3, with a 44% year-over-year growth in this category [8] Future Outlook - Guidance for the remainder of fiscal year 2025 suggests continued growth in GMV and revenue, along with improving adjusted operating margins [9] - The company is focused on addressing challenges in the competitive BNPL sector through innovation in fee structuring and maintaining transparent pricing [11] Market Position - Affirm's stock forecast indicates a potential upside of 10.76%, with a 12-month price target of $64.15 based on 24 analyst ratings [11] - The company differentiates itself through AI-driven underwriting and an expanding product ecosystem, including the Affirm Card [11]