Affirm's Repeat Users: A Strong Signal for Sustainable BNPL Growth?

Core Insights - Affirm Holdings, Inc. (AFRM) has established a unique position in the rapidly expanding Buy Now, Pay Later (BNPL) market, emphasizing transparency and catering to both high-ticket and low-ticket purchases while providing convenient financing options [1] Company Performance - In the third quarter of fiscal 2025, total transactions increased by 45.6% year over year to 31.3 million, with a repeat transaction rate of 94%, indicating strong customer trust and loyalty [2][9] - The company reported a 36% year-over-year increase in total revenues, projecting fiscal 2025 revenues to be between $3.163 billion and $3.193 billion [3][9] - Affirm has an active merchant network of nearly 360,000 partners, which enhances its revenue potential by fostering repeat usage among customers [3] Competitive Landscape - Competitors in the BNPL space include PayPal Holdings, Inc. (PYPL) and Sezzle Inc. (SEZL). PayPal's net revenues grew by 5% year over year, with a total payment volume increase of 6% [5] - Sezzle's total revenues surged by 76.4% year over year, with total transactions rising by 62.6% to 8.2 million and a repeat usage rate of 96.4% [6] Valuation and Estimates - Affirm's shares have gained 19.8% year-to-date, outperforming the industry average increase of 17.5% [7] - The forward price-to-sales ratio for AFRM is 5.83, which is above the industry average of 5.55 [10] - The Zacks Consensus Estimate for Affirm's fiscal 2025 earnings suggests a growth of 103% compared to the previous year [11]