Why Wolfe Research Maintains a Cautious Stance on Affirm Despite Multiple Growth Drivers

Core Viewpoint - Affirm Holdings, Inc. is recognized as a promising FinTech stock for 2026, but Wolfe Research maintains a cautious stance due to valuation concerns despite the presence of multiple growth drivers [1][4]. Growth Drivers - The increasing adoption of 0% APR installment loans is a significant growth factor, as merchants prefer promotional financing over upfront discounts, allowing them to maintain margins while enhancing conversion rates [2]. - The development of the Affirm Card is another key growth lever, enabling consumers to use Affirm's pay-over-time functionality for everyday spending, which boosts engagement and transaction frequency [3]. - Affirm's international expansion, particularly into European markets, presents a long-term opportunity to diversify revenue streams [3]. Valuation Concerns - Wolfe Research initiated coverage with a price target range of $72 to $82, indicating that much of the anticipated operational progress is already priced into the stock, leading to a constrained upside potential without a reset in valuation expectations [4].