Affirm fintech stocks at their highest since 2022. Why does Wall Street advise buying?

Shares of fintech company Affirm Holdings soared by 25% during trading on August 29 and reached the maximum for more than 3.5 years. The company published good reports, and the optimism was reinforced by positive forecasts from leading investment banks and an increase in the target price. However, some experts warn: the stock already looks expensive, and new entry opportunities may appear only after a pullback.

Affirm Holdings shares jumped 25% in trading Friday after posting strong fiscal fourth-quarter results. At their peak for the day, they were worth $100, their highest since January 2022. Compared to the beginning of 2025, the securities are now worth 46% more thanks to a series of upgrades and positive comments from analysts, Barron's writes.

Affirm's revenue rose 33% to $876 million: it beat analysts' forecast of $837 million, according to FactSet data cited by Barron's. The company reported earnings of 20 cents per share, compared with a loss of 14 cents a year earlier.

Gross sales volume (GMV) - a key metric that reflects total transactions on the platform minus refunds - rose 43% to $10.4 billion, also up from the previous quarter's $8.6 billion.

"In fact, this is our largest GMV quarter ever, which is unusual for a fourth quarter. It's also the first time we've shown an operating profit as a public company, and that's a really big accomplishment for us," Chief Operating Officer Michael Linford told Barron's.

Jefferies analysts reiterated a buy recommendation on Affirm shares with a $95 target price, noting that the company reported "another strong quarter" and gave an outlook that is "likely to please optimists." Their valuation suggests the stock is up 19% relative to its closing price on Aug. 28. The bank emphasized that credit metrics and margins remain stable or even improving. This is because Affirm has expanded the share of zero-interest installment loans, which are mostly taken out by customers with high FICO credit scores, and because of the overall stability of the company's loan portfolio. In addition, growth in active users and merchant partners accelerated in the quarter.

JPMorgan also maintained its recommendation to buy and target price of $94. Its estimation implies growth of quotations by 17.5%. The bank noted that GMV growth exceeded 40% for the first time since the start of the pandemic, and nominal transaction volume reached a record high. At the same time, Affirm's stated profitability targets for fiscal 2026 were "notably above" JPMorgan's own forecasts.

That said, MJP Wealth Advisors Chief Investment Officer Brian Wendig said before Affirm's report that investors should stay away from Affirm for now because the stock is too expensive. "I rather look at this company as a 'sell now, buy later' company," Wendig said.

However, of the 24 analysts covering Affirm shares, 16 are positive and recommend buying (Buy rating), while the other eight advise holding them, MarketWatch shows.

Affirm projected that gross merchandise sales (GMV) in FY 2026 will be at least $46 billion and revenue in the current quarter (the first of the fiscal year) will be in the range of $855-885 million.

According to Chief Operating Officer Michael Linford, Affirm always lays out a "bottom line" in its projections and expects to exceed the reported numbers. "We deliberately formulate cautious benchmarks - and yet we take them very seriously," he said.

Management has traditionally given conservative guidance, so Affirm has room to exceed expectations on key metrics, Jefferies analysts said.

In May, Affirm's stock slid sharply after its fiscal fourth-quarter outlook disappointed investors and analysts questioned how much macroeconomic uncertainty and a related slowdown in consumer spending would hit results. At the time, company management said the duties did not pose a serious threat.

Asked about trends in consumer spending right now, Linford emphasized that despite the volatility, Affirm feels confident. "Ultimately, the impact [of duties] will affect sellers, and we help them sell goods. It's an incredibly valuable service when businesses are facing major changes," he noted.

In March 2025, it became known that Swedish startup Klarna would replace Affirm as a partner of the largest US retailer Walmart. After that, Affirm's shares collapsed to a four-and-a-half-month low. At the same time, the company claimed that its program with Walmart brings only 5% GMV and 2% adjusted operating profit.

On Thursday, Michael Linford said Affirm will be finally replaced by Klarna in Walmart's infrastructure in the second quarter. However, that doesn't mean the end of the partnership with the retailer. "We have a direct-to-consumer business and can work with those merchants that we are no longer integrated with," Michael Linford said.

This article was AI-translated and verified by a human editor