Affirm Holdings Inc. website home screen on a laptop pc in an arranged photograph taken in Little Falls, Recent Jersey.
Gabby Jones | Bloomberg | Getty Images
Affirm shares popped 28% on Friday, a day after the buy now, pay later firm reported fiscal fourth-quarter results that topped expectations and gave optimistic guidance for the primary quarter.
Here’s how the corporate did:
- Loss per share: 69 cents vs. 85 cents as expected by analysts, in accordance with Refinitiv.
- Revenue: $446 million vs. $406 million as expected by analysts, in accordance with Refinitiv.
Affirm also gave strong guidance for the fiscal first quarter, projecting $430 million to $455 million in revenue, versus analyst expectations of $430 million.
The corporate reported gross merchandise volume, or GMV, of $5.5 billion, a rise of 25% 12 months over 12 months, and better than the $5.3 billion expected by analysts, in accordance with StreetAccount. GMV is a closely watched industry metric used to measure the whole value of transactions over a certain period.
Affirm posted a net lack of $206 million, or 69 cents a share, in comparison with a net lack of $186.4 million, or 65 cents a share, within the year-ago quarter.
Buy now, pay later services equivalent to Affirm soared in the course of the pandemic alongside a lift in online shopping. But Affirm has been contending with a worsening economic environment, in addition to rapidly rising rates of interest.
“Despite significant changes in rates of interest and consumer demand, we still delivered good credit results, unit economics, and GMV growth,” Affirm finance chief Michael Linford said in a press release. “We also demonstrated that the business can proceed to expand profitably even in a high rate of interest environment.”
The corporate acknowledged in its earnings report that the resumption of student loan payments in October shall be “a modest headwind” to its fiscal 2024 GMV.
Analysts largely cheered the outcomes. Deutsche Bank analysts raised their price goal from $12 to $16 and reiterated their hold rating on the stock. They pointed to growth of the Affirm Card, the corporate’s debit card. Affirm was trading at over $17 a share midday Friday.
“While some uncertainty stays around how AFRM’s model will grow within the out years amid a cloudy macro, the corporate continues to indicate differentiated credit performance and we see potential upside to numbers if the Affirm Card lives as much as the lofty expectations mgmt. has set for it,” the analysts wrote.
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