Affirm shares surge 34% and head for best day in three years after earnings beat

Affirm shares surge 34% and head for best day in three years after earnings beat


Drew Angerer / Getty Images 

Affirm shares soared 34% on Thursday and were on pace for their best day in almost three years, after the provider of buy now, pay later loans beat on the top and bottom lines in its earnings report.

If the rally holds, it will be the third-biggest rally for the stock since the company’s IPO in January 2021. The stock was trading at $42.17 as of early afternoon.

Following the market close on Wednesday, Affirm said revenue in the fiscal fourth quarter climbed 48% from a year earlier to $659 million, and that its net loss narrowed to $45.1 million from $206 million in the same period a year ago. The company beat estimates for revenue and reported a narrower-than-expected loss.

For the current quarter, Affirm sees revenue in the range of $640 million and $670 million. Analysts polled by LSEG called for revenue of $625 million.

Affirm CEO Max Levchin said in a note to shareholders that the company set a new goal of hitting operating profitability on a GAAP basis by the fiscal fourth quarter of 2025.

Analysts for Mizuho called it a “killer quarter” for Affirm in a note on Thursday, and said the “prospect of turning GAAP operating income-positive” will be “a major milestone.”

Even after Thursday’s rally, Affirm shares are still down about 14% for the year, while the Nasdaq is up 18%. But the stock has been trending higher lately, up 50% in August. Federal Reserve Chairman Jerome Powell signaled Friday that lower interest rates could be coming as soon as September.

Bank of America analysts said in a note last month that rate cuts would be beneficial to Affirm’s funding costs and for gain on loan sales. The company moved its merchants to a 36% APR cap on loans, up from 30% previously, and analysts said this “should remain a tailwind for yields and GMV growth.”

Mizuho projects that a new Apple Pay partnership could add $12 billion to Affirm’s total addressable market once it goes live later this year.

WATCH: Affirm CEO on consumer behavior

Affirm CEO on consumer behavior: 'shopping is back on and people are buying'



Source

Are 2 to 3 cups of coffee a day too much? It’s complicated, experts say: ‘It’s different for each person’
World

Are 2 to 3 cups of coffee a day too much? It’s complicated, experts say: ‘It’s different for each person’

Two-thirds of Americans drink coffee every single day, according to data collected by the National Coffee Association in 2022, and the debate about how much is too much and whether or not any amount of caffeine is safe persists. But recent research shows that the answer is more complicated than you’d think. A Harvard study, that followed […]

Read More
Media trailblazer Tom Rogers changes ‘raging bull’ stance on Netflix, sees worrisome signs
World

Media trailblazer Tom Rogers changes ‘raging bull’ stance on Netflix, sees worrisome signs

Former NBC Cable President Tom Rogers is dialing back his bullishness on Netflix. The media trailblazer, who was a self-proclaimed “raging bull” on Netflix, told CNBC’s “Fast Money” this week he’s starting to worry — and listed competition with free content on YouTube as a headwind. “[Netflix] still [has] more hit shows than all the […]

Read More
I went to a Costco in Japan—the variety of foods was ‘incredible’: Here’s the stuff you don’t really see in the U.S. stores
World

I went to a Costco in Japan—the variety of foods was ‘incredible’: Here’s the stuff you don’t really see in the U.S. stores

As a Japanese nutritionist living in the U.S., I love shopping for traditional foods that I grew up eating, such as seaweed, beans, matcha, multigrain rice, and sweet potatoes. I sometimes go to Costco to buy those staples in bulk. But during a recent trip to Japan, I had the chance to shop at the […]

Read More