Affirm Stock Jumps 76% in 6 Months: Buy Now, Thank Yourself Later?

Core Insights - Affirm Holdings, Inc. (AFRM) shares have surged 76% over the past six months, outperforming the broader market and peers, with the industry advancing 32.2% and the S&P 500 gaining 23.1% [1][2] - The strong performance is attributed to positive financials, strategic partnerships, optimistic guidance, and innovation enhancing recurring revenue streams [2] Financial Performance - Analysts project Affirm's fiscal 2026 earnings at 84 cents per share, a significant increase from 15 cents a year ago, with fiscal 2027 earnings expected to rise another 72% year over year [4] - Revenue growth rates for fiscal 2026 and 2027 are anticipated at 23.8% and 22.5%, respectively [4] - Gross merchandise volume is expected to reach $46 billion in fiscal 2026, up from $36.7 billion the previous year, with adjusted operating margin projected to expand to 26.1% from 24.1% in fiscal 2025 [5] Expansion Strategy - Affirm is expanding internationally, with plans to enter Western Europe, starting with France, Germany, and the Netherlands, leveraging partnerships, including a strategic tie-up with Shopify [6][9] - The company is also targeting new verticals, such as gaming, through a collaboration with Xsolla, and expanding its product suite to include debit-based solutions and B2B payment tools [10] Customer Engagement - A notable 95% of transactions in the fiscal fourth quarter came from returning users, indicating strong customer loyalty and predictable recurring revenue [13] - Demand for 0% APR installment plans has increased by 93% year over year, representing 14% of total GMV, with total transactions rising 45.6% year over year to 31.3 million [14] Competitive Positioning - Affirm's valuation reflects its growth profile, trading at 5.62X forward 12-month sales, slightly above the industry average of 5.46X and significantly higher than its three-year median of 3.85X [12] - The company continues to enhance its value proposition by offering transparent payment terms, which reduces cart abandonment rates for merchants [15] Strategic Partnerships - Extended partnerships with Apple Pay and Google are expected to boost in-store BNPL adoption and reshape Affirm's digital footprint, enhancing its visibility and growth potential [11]