On Tuesday, many investors chose to buy Affirm Holdings (AFRM 8.82%) stock. The buy-now, pay later (BNPL) specialist saw a nearly 12% increase in its share price following comments from one of the company's top managers, as well as an analyst price target upgrade.
A bullish discussion
The comments were made by Affirm CFO Rob O'Hare in a fireside chat presented by the company. In his presentation, O'Hare discussed the current state of Affirm, as well as the broader BNPL environment.
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The executive discussed Affirm's current performance heading into the holiday season, a particularly crucial time for the retail sector. According to him, quarter-to-date trends are looking quite favorable for its business. He also mentioned that customer delinquency rates were staying level.
That bullish overview clearly resonated with one analyst, Adam Frisch of Evercore ISI. Subsequent to the chat, Frish reiterated his outperform (read: buy) recommendation on Affirm, and his $95 per share price target.
NASDAQ: AFRM
Key Data Points
Unfair punishment
According to reports, the analyst believes that Affirm stock was unfairly penalized due to recently released third-party data. This indicated the company suffered a week-over-week decline in volumes. In his chat, O'Hare said that the data had serious tracking errors, implying that it was not reliable.
Assuming that's the case, Affirm appears to be on its way to delivering the consensus analyst estimate for 31% year-over-year growth in gross merchandise value (GMV) in its current quarter, Frisch wrote.
Some market players are concerned that Affirm's core customer base of relatively less affluent clients will pull back on spending. While that's always a concern when the economy starts to wobble, I believe that BNPL is quickly becoming a go-to buying tool for such individuals; given this, Affirm's business is more resilient than those fears would suggest.
