Affirm Holdings
stock was rising Tuesday after Jefferies analysts highlighted the growing adoption of the “buy now pay later” service.
On Tuesday, John Hecht and his team got incrementally less negative on the stock, upgrading the financial technology company from an Underperform or Sell equivalent rating to Neutral. They boosted their price target for the stock to $30 from $9.50 earlier.
Affirm’s stock gained 2.1% to $29.98 on Tuesday.
Affirm, which allows consumers to split purchase payments into installments, expanded rapidly during the pandemic as Americans flocked to online shopping. Two years ago the stock traded around the $160 mark, but concerns about rising issuer funding costs spurred by higher interest rates have cut the stock to one-fifth of its value.
Still, it has partially caught up this year; shares are up 203%, with a 12% gain on Cyber Monday. Hecht in his note cited data from Adobe Analytics, which tracks online shopping, as one reason for further momentum. Adobe said Monday would mark the biggest U.S. online shopping day of all time, and Americans would use the “buy now, pay later” activity at record levels.
Affirm becomes the “prime benefactor” as the pay-later trend gains market share, Hecht wrote. The company has added about 21,000 merchants over the past year, including travel booking websites Kayak and
Booking.com
and Tik Tok shop, he added.
To be sure, Affirm faces growing competition from new entrants, including Apple, which introduced a similar service earlier this year. Investors could learn more about Affirm’s outlook at a Wells Fargo conference later today.
Write to Karishma Vanjani at [email protected]
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