Strong outlook and better-than-expected performance boost Affirm shares 28%

Affirm also provided solid revenue estimates for the fiscal first quarter, estimating $430 million to $455 million versus analyst expectations of $430 million.

According to StreetAccount, the company recorded gross merchandise volume, or GMV, of $5.5 billion, a 25% increase year over year and higher than the $5.3 billion projected by analysts. GMV is a frequently followed industry metric that measures the total value of transactions over a specific time period.

Affirm lost $206 million, or 69 cents per share, compared to $186.4 million, or 65 cents per share, in the previous quarter.

Purchase now and pay later During the epidemic, services like Affirm grew in popularity, as did online purchasing. However, Affirm has been dealing with a deteriorating economic environment as well as quickly rising interest rates.

“Despite significant changes in interest rates and consumer demand, we still delivered good credit results, unit economics, and GMV growth,” said Michael Linford, finance chief of Affirm. “We also demonstrated that the business can continue to expand profitably even in a high-interest-rate environment.”

In its results release, the business noted that the resumption of student loan payments in October will be “a modest headwind” to the fiscal 2024 GMV.

Analysts were generally pleased with the findings. Analysts at Deutsche Bank boosted their price target for the stock from $12 to $16 and maintained their hold recommendation. They emphasized the expansion of the Affirm Card, the company’s debit card. Affirm was selling at more than $17 a share at midday Friday.

“While some uncertainty remains around how AFRM’s model will grow in the coming years amid a cloudy macro,” the analysts wrote. “The company continues to show differentiated credit performance and we see potential upside to numbers if the Affirm Card lives up to the lofty expectations mgmt. has set for it.”