Affirm’s Stock Falls Over 13% as Earnings Report Disappoints Wall Street
Affirm Holdings Inc.’s stock experienced a significant drop of more than 13% following its latest earnings report, disappointing Wall Street. Although the company beat expectations with its fiscal second-quarter results, an outlook for the second half of the fiscal year suggested slower growth in revenue, adjusted operating income, and gross merchandise volume. Analysts are attributing the decline to these factors, with one analyst suggesting that it may put pressure on the stock in the short term.
Analysts Offer Mixed Opinions on Affirm’s Performance and Valuation
Analysts from different firms have varying opinions on Affirm’s performance and valuation. While some remain bullish on the company’s execution and believe that valuation debates are irrelevant, others argue that Affirm is overvalued and face challenges in closing the monetization gap with its competitors. However, there is optimism as one analyst suggests that the selloff could present a buying opportunity, stating that the company’s outlook is achievable and valuing Affirm’s stock at 8 times estimated revenue for 2025.
Wells Fargo Analyst Doubles Price Target, Citing Market Momentum
Wells Fargo analyst Andrew Bauch doubled his price target for Affirm’s stock to $40, stating that valuation debates are fruitless considering the lack of a true publicly traded peer for the company. Bauch believes that market momentum will continue to influence the stock’s performance and offers a neutral equal-weight rating.
Morgan Stanley Analyst Argues Overvaluation and Challenges Ahead
Morgan Stanley analyst James Faucette expresses concern about Affirm’s valuation, stating that the company’s rate of improvement does not justify its current valuation. Faucette also highlights the challenges Affirm may face in closing the monetization gap with Capital One while maintaining revenue growth. He maintains an underweight rating and sets a target price of $20 for Affirm’s stock.
Mizuho Analyst Sees Buying Opportunity After Friday’s Selloff
Mizuho analyst Dan Dolev considers Friday’s selloff as a potential buying opportunity. Dolev believes that Affirm’s outlook is easily achievable and values the stock at 8 times estimated revenue for 2025. He rates Affirm shares as a buy with a target price of $65, stating that the company is one of the most innovative names in their coverage universe.
In conclusion, Affirm’s stock experienced a significant drop following its latest earnings report, which disappointed Wall Street due to a lower growth outlook for the second half of the fiscal year. Analysts offer mixed opinions on the company’s performance and valuation, with some remaining bullish, while others argue that the stock is overvalued. Despite the decline, one analyst sees the selloff as a buying opportunity, citing the company’s achievable outlook.
Analyst comment
The news about Affirm’s stock falling over 13% is negative. As an analyst, it is expected that the market will experience a short-term decline in the stock. However, there are mixed opinions from analysts, with some seeing the selloff as a buying opportunity while others believe the stock is overvalued. The market will be influenced by factors such as Affirm’s performance, its ability to close the monetization gap, and market momentum.
