Follow Affirm to never miss an important update.
After Affirm's November results, we updated our fair value and raised our projections for its card to reach 6 million active users. We have added the use of transformer-based machine learning models to the specific factors we track for underwriting success. We also added the company's shift toward insurance-backed funding to our analysis of its capital structure. We increased our expectation for profit margins after the business kept 30% of its revenue as operating profit over the last three months.
Affirm started its fiscal year with 47 cents in profit per share, beating the 38 cents analysts had predicted. Revenue reached 1.26 billion dollars, also coming in ahead of expectations. Management noted that the business is succeeding by being a counterintuitive lender, often asking customers to do more work upfront to ensure they can actually afford their purchases.
This reliability is the key to our view on the stock. By using deep data to price risk better than traditional banks, Affirm is proving it can grow its lending volume without seeing a spike in unpaid debts. Even as the broader market fell today, these results show the core business of buy-now-pay-later is healthy and increasingly profitable.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Affirm is set to report its latest quarterly results today. Analysts are looking for revenue of about 1.21 billion dollars and earnings of roughly 38 cents per share. The company has a long streak of beating these targets, having topped expectations in each of its last eight quarters. Beyond the headline numbers, the most important thing to watch is the growth of the Affirm Card. This card is the engine that turns occasional shoppers into daily users, and its success is central to the company's path toward higher profits. We will also look for updates on how many people are paying their loans back on time, which shows if the company's credit models are still working as intended.
Sur La Table has partnered with Affirm to let customers split the cost of kitchen tools and cookware into installments. This adds another name to Affirm's network of retailers, which already includes giants like Amazon and Walmart. While a single merchant deal like this is small on its own, it continues the company's strategy of becoming a standard payment option for high-end retail purchases.
Source: Business Wire
Affirm is scheduled to report its latest quarterly results on Thursday, November 5. Analysts are looking for revenue of about 1.2 billion dollars, as the company continues to focus on turning its buy-now-pay-later service into a more frequent payment tool through its physical card. This report will be an important check on how well its credit models are holding up. While the company has a strong record of meeting its own targets, the focus for long-term owners remains on whether it can keep growing its transaction volume without seeing a meaningful rise in the number of people who fall behind on their payments.
Management has a perfect record of beating their own targets for eight straight quarters. This shows they set a bar they know they can clear while the business consistently outruns expectations.
| Expectation | |
|---|---|
| EPS | $0.38 |
| Revenue | $1.21B |