$Affirm Holdings, Inc.(AFRM)$ is scheduled to report its Q4 2025 earnings on Thursday, August 28, 2025. The general sentiment among analysts is positive, with a strong expectation for both top-line and bottom-line growth. The company has successfully shifted its focus towards profitability while continuing to expand its presence in the "buy now, pay later" (BNPL) market.
Earnings Per Share (EPS): The consensus among analysts is that Affirm will report a significant increase in earnings, projecting a positive non-GAAP EPS of approximately $0.11, a massive turnaround from a loss of $0.14 in the same quarter last year.
Revenue: Revenue is expected to be around $839.9 million, representing a robust year-over-year increase of over 27%.
Summary of Affirm Holdings' Fiscal Q3 2025 Earnings
Affirm Holdings (AFRM) reported strong fiscal Q3 2025 results that generally surpassed analyst expectations. The company achieved a non-GAAP earnings per share (EPS) of $0.01, a significant improvement from a loss in the prior-year quarter and a beat on the consensus forecast of -$0.01. Revenue was also slightly better than expected, coming in at $783.1 million. The company's key metric, Gross Merchandise Volume (GMV), saw robust year-over-year growth of 36% to $8.6 billion, demonstrating strong platform usage and merchant adoption. This growth was driven by a high rate of repeat customers and successful partnerships.
Despite the strong performance, the stock saw a volatile reaction, initially declining before recovering, as investors focused on the company's guidance and its premium valuation.
The Lesson Learned from Q3 2025 Guidance
The primary lesson from Affirm's Q3 2025 guidance is that even strong results and a positive future outlook can be overshadowed by short-term concerns, particularly when a company's stock is trading at a premium valuation.
Affirm's guidance for fiscal Q4 2025 was a key point of contention. While the company projected revenue between $815 million and $845 million and GMV between $9.4 billion and $9.7 billion, which was in line with expectations, some investors were looking for an even more aggressive outlook to justify the stock's high valuation. The subsequent stock volatility, including an initial drop, was a direct reflection of this.
This taught a valuable lesson: For growth stocks, especially those in a competitive and sensitive sector like fintech, the market has a high, often demanding, bar. A "good" report and guidance may not be enough to satisfy investors who are looking for a "great" one. The market is highly sensitive to any hint of a slowdown or to a valuation that is not fully supported by near-term guidance, regardless of a solid long-term growth narrative.
Analysis of Q4 2025 Earnings Expectations
Focus on Profitability: Affirm's recent emphasis on achieving profitability has been well-received by the market. The company has demonstrated a consistent track record of beating earnings estimates, and this trend is expected to continue.
Macro and Strategic Tailwinds: The company is benefiting from strong partnerships with major retailers like Amazon and Shopify, and its expansion into new categories, such as groceries and travel, is driving increased Gross Merchandise Volume (GMV).
Key Metrics Investors Should Watch
Gross Merchandise Volume (GMV): This is the most crucial metric for Affirm, as it represents the total dollar amount of all transactions on its platform. Investors will be looking for a strong GMV number, with current consensus estimates around $9.6 billion, representing over 32% growth year-over-year.
Revenue and Active Consumers: The company's ability to monetize its platform is key. Investors should watch for the breakdown of revenue, particularly from its merchant and card networks, as well as the growth in the number of active consumers and the transactions per active consumer.
Credit Performance and Transaction Costs: In the BNPL space, credit quality is paramount. Investors will be scrutinizing credit performance metrics to ensure that the company's growth is not coming at the expense of loan quality. Additionally, transaction costs, which the company expects to be in the range of $430-$445 million, will be watched closely.
Forward Guidance: As with most companies, the guidance for the upcoming quarters will be a decisive factor. The market will be looking for a confident outlook that reinforces the profitability narrative and demonstrates sustained growth.
Affirm Holdings (AFRM) Price Target
Based on 19 analysts from Tiger Brokers offering 12 month price targets for Affirm Holdings in the last 3 months. The average price target is $75.10 with a high forecast of $95.00 and a low forecast of $56.00. The average price target represents a 3.66% change from the last price of $77.95.
Short-Term Trading Opportunities Post-Earnings
Trading Affirm post-earnings is highly volatile and carries significant risk. The stock has a history of sharp moves, with a median one-day decline of -10.9% on disappointing earnings reports in the past five years. The market's reaction will hinge on whether the company's report can justify its premium valuation.
Bullish Scenario: If Affirm beats on key metrics, particularly GMV and provides a strong outlook for future profitability, the stock could see a significant short-term rally. This would validate the company's strategic shift and reinforce its position in the BNPL market.
Bearish Scenario: On the other hand, if the company misses on any key metric, or if credit performance shows signs of deterioration, the stock is highly susceptible to a sharp and abrupt sell-off. The current high valuation means there is little room for error, and a miss could trigger a "growth scare."
The stock’s performance will be a direct reflection of whether the company can successfully continue its growth trajectory while maintaining credit quality and achieving profitability. Traders should be cautious and mindful of the stock’s high volatility.
Technical Analysis - Exponential Moving Average (EMA)
AFRM have managed to maintain its positive momentum from July, and we can see that after the recent pullback, the bulls are back in control, and we might be seeing the bulls trying for a daily uptrend continuation as the share price have cleared the short-term 12-EMA level.
One of the things that might benefit AFRM could be the possibility of a rate cut, because with a rate cut, we could be seeing an increase in consumer spending, so for now, I think investors might be focused on whether AFRM path towards profitability is clear, and I foresee some opportunities to get into AFRM, but my target price for entry is around $77.50.
I will be monitoring how AFRM will be trading today (27 Aug) during normal hours, and see if there is a small dip which I can buy into AFRM.
Summary
Affirm Holdings (AFRM) is scheduled to report its fiscal Q4 2025 earnings on August 28, 2025, with analysts holding a positive outlook. The company is expected to report a significant turnaround in profitability, with a projected non-GAAP EPS of $0.11, a notable improvement from a loss in the previous year's quarter. Revenue is forecasted to be approximately $839.9 million.
The key metric for investors will be Gross Merchandise Volume (GMV), with consensus estimates at around $9.6 billion, signaling strong platform usage. Investors will also be watching for continued growth in active consumers and merchant partnerships. Given the stock’s high valuation, the market will scrutinize credit performance and forward guidance. A strong report could lead to a rally, while any signs of credit quality deterioration or a cautious outlook could trigger a sharp sell-off.
Appreciate if you could share your thoughts in the comment section whether you think AFRM could have a better path laid out towards profitability with a potential rate cut in September.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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