$Affirm Holdings, Inc.(AFRM)$Affirm Holdings stock is soaring even after the company reported earnings that missed analyst forecasts for net income.
Affirm reported a fourth-quarter loss of 48 cents a share, missing forecasts for a 29 cent loss, on sales of $261.8M. Revenue beat expectations for $226.39M. The buy-now-pay-later company also said it expects fiscal first-quarter revenue of $240 million to $250 million, above forecasts for $234 million.
Affirm says it’s gaining traction in smaller-dollar items, signing up more merchants, and expanding its services. The company reported 29,000 active merchants on its network, up from 5,700 a year earlier.
Sales are accelerating in categories like fashion and beauty, along with “reopening” categories like travel, which hit 14% of gross merchandise volume.
The company’s GAAP loss would have been narrower without accounting for stock-based compensation and non-cash items. The company posted adjusted operating income of $14 million compared to a GAAP loss of $128 million.
Investors apparently put more weight on the revenue guidance than the earnings as Affirm stock jumped 20% in after-hours trading.
The shares have been on a tear since the company announced that it had struck a deal with Amazon.com ($Amazon.com(AMZN)$) to offer its BNPL service at checkout on Amazon’s site, aiming to roll it out over the next few months. Affirm said its deal with Amazon is “non-exclusive,” however, indicating that other BNPL services may also be available on the e-commerce site.
Mizuho Securities’ Dan Dolev called the results “outstanding” in a note. Gross merchandise volume, excluding sales related to Peloton products, was up 178%, marking a “significant acceleration” from the 100% growth in the prior quarter, he noted.
Dolev reiterated a Buy rating on the stock and $110 target, though that’s already looking stale. Shares were trading around $110 after-hours on Thursday, following a 5.2% gain in the regular session. The stock was up 40% over the past month of trading at Thursday’s close, and has gained 53% during the past three months.
News link : https://www.barrons.com/articles/affirm-earnings-stock-price-51631219357
Comments