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BofA Securities Initiates Coverage On Klarna With Buy Rating, $51 Price Target
Financial Modeling Prep· 2025-10-06 18:54
Core Viewpoint - BofA Securities initiated coverage on Klarna with a Buy rating and a price target of $51.00, highlighting its leadership in the Buy Now, Pay Later (BNPL) market [1] Group 1: Market Opportunity - BofA estimated the total addressable market for BNPL at $2.9 trillion by 2030, with significant growth potential in the U.S. [2] - Analysts noted that Klarna's expanding merchant network presents a major growth opportunity [2] Group 2: Competitive Advantages - Key competitive advantages for Klarna include solid credit performance, a favorable funding structure, and a diverse product suite [2] - The firm emphasized that Klarna's shares are trading at 8x enterprise value to projected 2026 gross profit, indicating a compelling valuation with room for upside [2]
PayPal Stock To $50?
Forbes· 2025-10-06 10:10
An illustrative stock graph displayed on a screen and PayPal logo displayed on a phone screen are seen in this illustration photo taken in Krakow, Poland on August 18, 2025. (Photo by Jakub Porzycki/NurPhoto via Getty Images)NurPhoto via Getty ImagesPayPal Holdings (NASDAQ: PYPL), the worldwide leader in digital payments, has faced challenges in 2025, with shares decreasing approximately 19% year-to-date to about $70. As investors consider if the stock's downturn indicates a buying opportunity, another urge ...
More shoppers are looking to use Buy Now, Pay Later for holidays, survey says
Yahoo Finance· 2025-10-06 09:03
More shoppers are open to using Buy Now, Pay Later loans, especially as the holiday gift-buying season approaches and as shoppers are more worried about rising prices and financial stress, according to a new survey by PayPal. USA TODAY got an exclusive first look at the survey. As the calendar starts to turn to the holidays, 60% of participants said they were feeling more financial stress in a survey by Talker Research for PayPal. The survey also showed that "about 80% of shoppers who have used or consid ...
The way your credit score is calculated is about to change — and as many as 91.5 million Americans will be impacted
Yahoo Finance· 2025-10-03 20:00
If you’ve been enjoying the freedom of Buy Now, Pay Later (BNPL) services, you’ve been basking in a period of little to no consequences for missed payments. BNPL lets you spread out the cost of a purchase over multiple payments. For many Americans, this is an appealing way to manage expenses, especially as inflation squeezes household budgets. Must Read As BNPL becomes more common, it’s quickly turning into an accepted credit option. In fact, 86% of Americans say they trust BNPL as a payment method, a ...
PayPal Sells $7B in US BNPL Receivables to Blue Owl Capital in Two-Year Agreement
Yahoo Finance· 2025-10-01 06:16
PayPal Holdings Inc. (NASDAQ:PYPL) is one of the best NASDAQ stocks to buy according to hedge funds. On September 24, PayPal Holdings and alternative asset manager Blue Owl Capital Inc. (NYSE:OWL) executed a two-year agreement. Under this deal, funds managed by Blue Owl will purchase ~$7 billion of Buy Now, Pay Later/BNPL receivables originated by PayPal in the US. This transaction aligns with PayPal’s balance sheet-light model for credit, but PayPal will retain full responsibility for all customer-facing ...
PayPal's Buy Now Pay Later Grows Fast: What Drives This Surge?
ZACKS· 2025-09-25 15:16
Key Takeaways PayPal's BNPL volume rose over 20% in Q2 2025, with monthly active accounts up 18% year over year.A two-year deal with Blue Owl will see $7B of U.S. BNPL receivables purchased.Ace Hardware saw a 35% PayPal sales boost and 7x higher order values since adopting BNPL.PayPal Holdings’ (PYPL) Buy Now, Pay Later (BNPL) feature is a major growth engine. The company’s BNPL is a fast-growing payment mode allowing consumers to purchase goods online and pay for them in interest-free installments over wee ...
Your credit score could soon be impacted by 'pay later' loans. Details about the change.
Yahoo Finance· 2025-09-22 09:30
Core Viewpoint - The introduction of Buy Now, Pay Later (BNPL) loans into credit scoring by FICO will begin impacting consumer credit scores starting in fall 2025, marking a significant change in how these loans are perceived in the credit landscape [2][3][7]. Group 1: Overview of BNPL Loans - BNPL loans allow consumers to make purchases in installments, typically with little to no interest and without hard credit checks [4]. - Major BNPL providers include Affirm, Klarna, Afterpay, and PayPal Pay Later, which offer flexible payment options at checkout [5][10]. Group 2: Impact on Credit Scores - Previously, BNPL loans did not affect credit scores as they were not reported to credit agencies, allowing consumers to use them without impacting their credit history [6][11]. - FICO's new scoring models, FICO Score 10 BNPL and FICO Score 10 T BNPL, will incorporate BNPL data, but lenders will need sufficient data from BNPL providers before these scores can be utilized [8][9]. Group 3: Expected Changes and Consumer Behavior - The impact of BNPL loans on credit scores is expected to be similar to opening a new account, with scores potentially improving or decreasing by about 10 points for most consumers [12]. - The effect on individual credit scores will vary based on the consumer's overall credit profile and the specifics of their BNPL loans [13]. Group 4: Consumer Usage Trends - A significant portion of BNPL users are utilizing these loans for essential expenses, with 47% using them for groceries and 35% for medical bills, raising concerns about the financial health of these consumers [14][15]. - Nearly half of BNPL users have missed at least one payment, indicating potential risks associated with increased reliance on these financial products [15].
What happened to layaway?
Yahoo Finance· 2025-09-19 09:00
Core Viewpoint - The article discusses the historical context and decline of the layaway payment system, contrasting it with the modern "buy now, pay later" (BNPL) options that have gained popularity among consumers [1][2]. Group 1: History and Popularity of Layaway - Layaway originated during the Great Depression in the 1930s as a means for retailers to help customers pay over time without incurring credit risk [3]. - The system remained popular into the 1980s and 1990s, allowing consumers to reserve items without credit checks and without interest, making it accessible for lower-income shoppers [4]. - Major retailers like Sears, Kmart, and Walmart promoted layaway, which served as an inclusive marketing strategy, especially during holiday shopping [5]. Group 2: Decline of Layaway - Layaway lost its appeal over time due to the emergence of new financial tools and changing shopping habits, which made it feel slower and less convenient compared to modern payment options [6]. - Factors contributing to the decline included easier access to credit and the rise of online shopping, which shifted consumer preferences away from traditional layaway systems [6].
Affirm Expands BNPL Reach With ServiceTitan & Vagaro Partnerships
ZACKS· 2025-09-17 17:11
Core Insights - Affirm Holdings, Inc. (AFRM) is enhancing its leadership in the Buy Now, Pay Later (BNPL) sector through strategic partnerships with ServiceTitan and Vagaro, expanding its market reach and service offerings [1][8] Group 1: Partnerships and Market Expansion - The collaboration with ServiceTitan allows contractors to offer clients flexible pay-over-time options for home repair projects, addressing the growing demand for affordable payment solutions in the home improvement sector [2] - The partnership with Vagaro connects Affirm to approximately 100,000 businesses in the beauty, wellness, and fitness industries, enabling consumers to manage payments for lifestyle services, thereby increasing sales and customer retention for small businesses [3][8] - These partnerships signify Affirm's strategy to integrate into everyday transactions, enhancing its ecosystem and consumer base for sustained growth in the evolving BNPL landscape [4] Group 2: Competitive Landscape - Competitors in the BNPL space include PayPal and Visa, with PayPal reporting 438 million active accounts and a 5% year-over-year increase in net revenues to $8.3 billion in Q2 2025 [5] - Visa experienced a 10% year-over-year increase in processed transactions and an 8% rise in payment volume in Q3 fiscal 2025, alongside a 14% growth in net revenues [6] Group 3: Financial Performance and Valuation - Year-to-date, AFRM's shares have increased by 47.7%, outperforming the industry average rise of 23.6% [7] - Affirm's forward price-to-sales ratio stands at 7.03, above the industry average of 5.85, indicating a higher valuation compared to peers [9] - The Zacks Consensus Estimate projects a 473.3% growth in Affirm's fiscal 2026 earnings and a 23.4% year-over-year growth in revenues for the same period [10]
Affirm vs. Block: Which Fintech Stock Has More Growth Potential?
ZACKS· 2025-09-17 17:01
Core Insights - The fintech revolution has significantly changed consumer spending, borrowing, and money movement, highlighting companies like Affirm Holdings, Inc. and Block, Inc. as key players in digital payments [1][2] Affirm Holdings, Inc. - Affirm is a leader in the "buy now, pay later" (BNPL) sector, with active consumers reaching 23 million as of June 30, 2025, and partnerships with major retailers like Shopify, Costco, and Amazon [4][10] - The company reported a gross merchandise volume (GMV) increase of 43% year over year to $10.4 billion, with total revenues growing 33% to $876 million in the last quarter [5][10] - Affirm's long-term debt-to-capital ratio stands at 71.8%, indicating a need for balance sheet improvement, while management is focused on diversifying funding sources [6][7] - The company has a strong consumer engagement rate, with 95% of transactions being repeat purchases in the fourth quarter of fiscal 2025, and is expanding into international markets [5][7] - Analysts project Affirm's earnings per share (EPS) to increase by 473% in fiscal 2026, supported by strong revenue growth and market positioning [10][13] Block, Inc. - Block has diversified from its original Square POS systems into Cash App, BNPL through Afterpay, and Bitcoin-related revenue streams, but this diversification also introduces volatility [8][12] - In the June quarter of 2025, Block's BNPL GMV reached $9.1 billion, a 17% year-over-year increase, but it lags behind Affirm's growth [9][10] - Block's total net revenues decreased by 2% year over year, primarily due to lower Bitcoin contributions, while its adjusted operating margin was 22% compared to Affirm's 27% [11][12] - The company's cash flow to invested capital is at 5.7%, trailing Affirm's 7.7%, indicating less efficiency in converting invested funds into cash [12] - Analysts expect Block's EPS to decline by 23.7% in fiscal 2025, reflecting challenges in growth compared to Affirm [10][14] Market Performance - Affirm's stock has increased by 47.7% year-to-date, indicating strong investor confidence, while Block's stock has declined by 10.9% during the same period [15] - Affirm trades at a forward price-to-sales ratio of 7.03, reflecting its growth potential, while Block trades at a lower ratio of 1.76 [19] Conclusion - Affirm is positioned as a focused BNPL leader with strong growth prospects, while Block's diversified ecosystem presents both opportunities and risks due to its exposure to crypto and lower margins [21][22] - Affirm's better earnings growth estimates and efficiency levels suggest a more favorable risk-reward profile compared to Block [22]