Earnings Update: Affirm Holdings, Inc. (NASDAQ:AFRM) Just Reported And Analysts Are Boosting Their Estimates

Affirm Holdings, Inc. (NASDAQ:AFRM) defied analyst predictions to release its second-quarter results, which were ahead of market expectations. The results overall were pretty good, with revenues of US$591m exceeding expectations and statutory losses coming in at justUS$0.54 per share, some 27% below what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Affirm Holdings

Taking into account the latest results, the current consensus from Affirm Holdings' 18 analysts is for revenues of US$2.21b in 2024. This would reflect a notable 16% increase on its revenue over the past 12 months. Losses are expected to hold steady at around US$2.43. Before this earnings announcement, the analysts had been modelling revenues of US$2.02b and losses of US$2.67 per share in 2024. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrades to both revenue and loss per share forecasts for this year.

It will come as no surprise to learn thatthe analysts have increased their price target for Affirm Holdings 18% to US$36.80on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Affirm Holdings analyst has a price target of US$65.00 per share, while the most pessimistic values it at US$13.00. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 33% growth on an annualised basis. That is in line with its 30% annual growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 3.7% annually. So it's pretty clear that Affirm Holdings is forecast to grow substantially faster than its industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Affirm Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for Affirm Holdings going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Affirm Holdings that you need to take into consideration.

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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.