Affirm Holdings, Inc. AFRM recently shared research findings showing that 71% of Canadians plan to maintain or increase their holiday spending this year despite economic challenges. However, shoppers are adopting a more thoughtful approach, focusing on meaningful purchases, seeking the best deals, and using flexible payment options like buy now, pay later (BNPL) to better manage their budgets.

The research reveals that 77% of consumers are adopting a "slow shopping" approach, taking extra time to evaluate whether a purchase is truly necessary. Additionally, 59% plan to complete their purchases on or after Black Friday, spreading their shopping across December. This strategy will likely help shoppers secure the best deals, explore promotions, and compare brands and styles.

Nearly 50% are using BNPL options to manage budgets effectively. Many shoppers are tilting towards 0% APR financing options without hidden fees and compound interests for shopping over traditional discounts. As consumers prioritize budgeting, value-driven shopping, and avoiding credit card debt, Affirm's payment plans have become more appealing. This will drive higher transaction volumes on its platform.

Retailers offering such flexible and transparent payment options are better equipped to capture a greater market share. By addressing the demand for such services, Affirm has managed to rapidly grow its merchant network. Recently, it integrated JD Sports into AFRM's extensive network of more than 320,000 merchants, including Amazon, Peloton, American Airlines, SeatGeek and others.

Price Performance

Over the past year, shares of Affirm have surged 108.7% compared with the 31.2% growth of the industry it belongs to.

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Zacks Rank & Key Picks

Affirm currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Business Services space are Coinbase Global, Inc. COIN, Cantaloupe, Inc. CTLP and DLocal Limited DLO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Coinbase’s current-year earnings of $5.39 per share indicates a massive jump from the year-ago level of 37 cents. COIN beat earnings estimates in three of the trailing four quarters and met once, with the average surprise being 341.4%. The consensus estimate for current-year revenues is pegged at $5.6 billion, implying 80.6% year-over-year growth.

The Zacks Consensus Estimate for Cantaloupe’s current-year earnings indicates a 113.3% year-over-year surge. CTLP beat earnings estimates in two of the trailing four quarters, met once and missed on the other occasion, with the average surprise being 20%. The consensus estimate for current-year revenues implies 15.9% year-over-year growth.

The consensus estimate for DLocal’s current-year earnings is pegged at 47 cents per share, which witnessed three upward revisions in the past month against none in the opposite direction. It beat earnings estimates in two of the trailing four quarters and missed twice, with the average surprise being 22.6%. The consensus estimate for DLO’s current-year revenues is pegged at $745 million, implying 14.6% year-over-year growth.

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Affirm Holdings, Inc. (AFRM) : Free Stock Analysis Report

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