By Emily Dattilo
Affirm Holdings has been getting the best of its competitors in the "buy now, pay later" space and the companies that use its products make up an "enviable roster," said BofA Securities, leading the firm to raise its price target on the stock.
Analysts led by Jason Kupferberg raised their price target on Affirms to $74 from $50 and reiterated a Buy rating.
The company is performing well in terms of gross merchandise value growth -- outpacing competitors such as privately owned Klarna and Block's Afterpay -- revenue less transaction costs, operating profitability trajectory, credit metrics, and funding, BofA wrote.
"AFRM's enviable roster of merchants (i.e., Amazon, Shopify, Walmart) and diversified loan products remain a differentiator," the analysts continued. "Given these dynamics, we see upside potential to near-term estimates."
The team believes the value proposition of BNPL for consumers and merchants is strong, and it expects BNPL to keep snapping up market share within the broader e-commerce market.
Beyond that, because Affirm is "the only pure-play publicly traded BNPL provider" (Klarna has announced plans for an initial public offering) it should benefit from growth catalysts over the next year or two including the Apple Pay Partnership announced in September, the analysts added.
Affirm stock gained 5.3% to $69.24 on Friday. Shares have risen more than 40% this year. Fintech peers were trading mostly to the upside, with PayPal Holdings gaining 1.7%, SoFi Technologies increasing 3.3%, and Block up 0.3%.
Write to Emily Dattilo at emily.dattilo@dowjones.com
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November 22, 2024 11:14 ET (16:14 GMT)
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