A Look at Affirm (AFRM) Valuation Following Major Partnerships With Wayfair, Worldpay, and Fanatics

Affirm Holdings (AFRM) has just struck a series of new partnerships with Worldpay, Wayfair, Fanatics, and FreshBooks. This move expands its buy-now-pay-later offering across major software and retail platforms. These integrations come as the holiday shopping season approaches.

See our latest analysis for Affirm Holdings.

A wave of these high-profile partnerships has come just as investors have started to bet on Affirm’s ability to scale. After a volatile year marked by both executive share sales and upbeat sector news, the stock’s momentum is building. With a 21% share price return year-to-date and an impressive 77% total shareholder return over the past year, sentiment is shifting on the company’s growth prospects.

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With the stock up strongly over the past year, the key question for investors now is whether Affirm’s recent partnerships and growth are already reflected in its share price or if there is still untapped upside left to capture.

Most Popular Narrative: 21% Undervalued

Affirm Holdings’ most followed narrative points to a fair value of $96.31, which is significantly above the latest closing price of $75.92. This sets the stage for a closer look at the assumptions powering such a high upside potential.

“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. This aligns 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.”

Read the complete narrative.

Curious about why this narrative commands such a strong premium? The foundations rest on bullish projections for revenue growth, expanding profit margins, and a future profit multiple that would make even industry leaders envious. The full story behind these bold forecasts awaits in the complete narrative.

Result: Fair Value of $96.31 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the loss of a major partner or a sharper than expected slowdown in consumer spending could quickly change Affirm’s growth trajectory and valuation outlook.

Find out about the key risks to this Affirm Holdings narrative.

Another View: The Market’s Pricing Signals

While analyst forecasts see Affirm Holdings as undervalued, a different approach using its price-to-sales ratio tells a more cautious story. Affirm is currently valued at 7.7 times sales, which is well above both the peer average of 3.9 and the industry benchmark of 2.5. The fair ratio, what the market could eventually price in, is just 4.3.

This gap signals that current optimism might be driving the stock further ahead than its fundamentals suggest. Will investors continue to pay a premium, or could a shift in sentiment quickly narrow the gap?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Affirm Holdings Narrative

If you want to take a different view or prefer diving into the numbers yourself, you can build your own custom narrative for Affirm Holdings in just a few minutes, and Do it your way.

A great starting point for your Affirm Holdings research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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