Last Update 11 Dec 25

Fair value Decreased 0.13%

AFRM: Expanding Platform Partnerships Will Drive Future Upside Momentum

Analysts have modestly trimmed their price target on Affirm Holdings, with the average estimate easing by a few dollars to the mid to high $80s range as they recalibrate valuations to lower peer multiples. At the same time, they are citing resilient consumer demand, strengthening profitability and reinforcing growth drivers from deepening partnerships with platforms like Amazon and Apple Pay, along with international expansion.

Analyst Commentary

Recent Street research highlights a generally constructive but more valuation-sensitive stance toward Affirm, with targets drifting lower in response to sector multiple compression even as estimates for growth and profitability remain supportive.

Bullish Takeaways

Bullish analysts emphasize Affirm's expanding ecosystem, pointing to multi year agreements with major platforms and deeper wallet integrations as key drivers of sustained GMV and user growth.
Several notes point to Affirm's proven domestic execution and early international traction as a core pillar of the long term growth narrative, arguing that partnership led expansion can scale efficiently without outsized marketing spend.
Initiations and upgrades highlight growing confidence in the revenue and margin trajectory, with some viewing improving unit economics and RLTC trends as underappreciated in current valuation levels.
Commentary from management discussions underscores a still solid spending profile among Affirm's user base and differentiating features such as no late fees, which are seen as supportive of long term brand strength and underwriting quality.

Bearish Takeaways

Bearish analysts are trimming price targets to bring valuations closer in line with growth peers, signaling less willingness to underwrite premium multiples despite favorable company specific fundamentals.
Some research frames the story as more balanced, maintaining neutral stances as they wait for further evidence that elevated growth and profitability can be sustained through a full macro cycle.
Competitive dynamics in buy now pay later, including the presence of other listed pure plays, are cited as a risk to long term share gains and pricing power, which could pressure upside to current targets.
A portion of the Street views the shares as already pricing in a strong holiday season and continued execution, leaving less room for error if consumer demand or credit trends were to soften from here.

What's in the News

Pacsun is partnering with Affirm through December 18, 2025, offering shoppers 10 percent off Holiday Gift Guide purchases with promo code AFFIRM and allowing eligible customers to pay over time with interest free biweekly or up to 24 month installments, expanding Affirm's reach across apparel and holiday gifting (company announcement).
Affirm expanded its partnership with Worldpay for Platforms, integrating Affirm's pay over time options into embedded payments for more than 1,000 SaaS platforms that processed over 400 billion dollars in volume over the past year, significantly broadening merchant and end customer access (company announcement).
Wayfair brought Affirm directly into checkout across all its brands, including Joss and Main, now known as Joss & Main, AllModern, Birch Lane, and Perigold. This integration gives eligible shoppers biweekly or monthly payment plans up to 36 months with rates as low as 0 percent APR ahead of key sales events and the holiday season (company announcement).
Affirm deepened its commerce infrastructure role by supporting Google's Agent Payments Protocol. This extends its BNPL capabilities to wallets, browsers, chatbots, and AI agents with real time risk assessment and transparent pay over time plans designed to embed BNPL into emerging agentic commerce flows (company announcement).
Affirm's flexible payment options became available for in store purchases via Apple Pay on iPhone, enabling approved U.S. consumers to split eligible purchases into biweekly or monthly installments starting at 0 percent APR while leveraging Apple Pay's secure, private checkout experience (product announcement).

Valuation Changes

Fair Value Estimate has edged down slightly, from approximately $92.83 to $92.71 per share, reflecting modestly lower implied upside.
Discount Rate has risen marginally, from about 8.02 percent to 8.02 percent, signaling a very small increase in the required return embedded in the model.
Revenue Growth has increased slightly, moving from roughly 24.05 percent to 24.44 percent, indicating a modestly more optimistic top line outlook.
Net Profit Margin has improved, ticking up from around 15.15 percent to 15.82 percent, pointing to incrementally stronger long term profitability assumptions.
Future P/E has declined from about 43.03x to 40.78x, suggesting a somewhat lower valuation multiple being applied to Affirm's projected earnings.

Expansion into new markets, product innovation, and strategic partnerships position Affirm for increased market share and revenue diversification in both online and offline retail.
Proprietary technology, strong risk management, and customer loyalty enhance margins, operational efficiency, and support long-term earnings growth.
Dependence on key merchant partners, rising competitive pressures, profitability challenges, international expansion risks, and macroeconomic headwinds threaten Affirm's growth, margins, and revenue diversification.

Catalysts

About Affirm Holdings

Operates payment network in the United States, Canada, and internationally.What are the underlying business or industry changes driving this perspective?

Adoption by a growing base of merchants and consumers, combined with expansion into new geographies (notably the imminent U.K. entry via Shopify), positions Affirm to capture larger volumes as e-commerce and embedded finance become increasingly central to global retail-likely driving top-line revenue growth.
Affirm's differentiated technology and underwriting (evidenced by the success with 0% APR loans and high user repeat rates) should improve customer lifetime value and reduce credit losses, supporting enhanced net margins and sustained earnings as more users graduate to interest-bearing products.
Rapid growth and strong engagement with Affirm Card-an actively invested product moving toward high attach rates and greater offline usage-expands Affirm's addressable market beyond online retail, diversifies revenue streams, and drives higher frequency of transactions, which should accelerate GMV and contribute to margin improvement.
Deployment of AdaptAI and other proprietary risk/pricing analytics gives Affirm a competitive edge in optimizing merchant and consumer conversion, reflected in measurable GMV increases for participating merchants, which will help support higher gross margins and revenue efficiency over time.
Affirm's embrace of point-of-sale and wallet integrations (such as with Stripe Terminal and other PSPs) unlocks large untapped offline retail and cross-platform opportunities, aligning Affirm's growth trajectory with broader industry trends in digitization and embedded finance, with a probable positive impact on future revenue scalability and market share.

Affirm Holdings Earnings and Revenue Growth

Affirm Holdings Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Affirm Holdings's revenue will grow by 22.9% annually over the next 3 years.
Analysts assume that profit margins will increase from 1.6% today to 12.6% in 3 years time.
Analysts expect earnings to reach $756.6 million (and earnings per share of $2.04) by about September 2028, up from $52.2 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $967.1 million in earnings, and the most bearish expecting $291.9 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 56.5x on those 2028 earnings, down from 532.4x today. This future PE is greater than the current PE for the US Diversified Financial industry at 16.4x.
Analysts expect the number of shares outstanding to grow by 3.69% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.11%, as per the Simply Wall St company report.

Affirm Holdings Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The impending loss of a large enterprise merchant partner (integration "goes away" at the end of fiscal Q1) could materially reduce revenues and slow GMV growth, especially over the holiday season, impacting Affirm's ability to maintain overall growth and earnings stability.
The rapid expansion of 0% APR products-currently less profitable and heavily reliant on merchant subsidies-may pressure net margins if merchant adoption stagnates, marketing budgets shrink, or competitors compress take rates, ultimately constraining long-term profitability and revenue growth.
Intensifying competition from both major tech players (e.g., Apple, PayPal, Square) and aggressive/irrational new entrants in BNPL and digital lending could erode Affirm's market share and pricing power, depressing gross margins and long-term revenue expansion.
Expansion into international markets (U.K. and Europe) carries significant execution and regulatory risks (local licensing, data access, established incumbents, lower brand awareness), which could raise customer acquisition costs, slow user growth, or result in sub-scale operations, dampening anticipated revenue diversification and operating leverage.
Affirm remains highly exposed to macroeconomic shifts affecting U.S. consumer health (e.g., student loan repayment resumption, higher interest rates, potential for rising delinquencies or unemployment); any deterioration could raise credit losses, increase provision expenses, and negatively impact bottom-line earnings even with strong current credit performance.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $93.184 for Affirm Holdings based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $115.0, and the most bearish reporting a price target of just $64.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $6.0 billion, earnings will come to $756.6 million, and it would be trading on a PE ratio of 56.5x, assuming you use a discount rate of 8.1%.
Given the current share price of $85.31, the analyst price target of $93.18 is 8.5% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Weigh Affirm Holdings Prospects Amid Slight Valuation Shift and Ongoing Growth Momentum