By Emily Dattilo
Affirm Holdings has demonstrated an ability to snag a larger piece of the "buy now, pay later" pie, which indicates potential for higher revenue, Jefferies argued.
Analysts led by John Hecht upgraded Affirm to Buy from Hold and increased their target for the stock price to $82 from $70. In premarket trading Thursday, the stock was up 2.6% at $64.97.
This year, shares have increased 29% through Wednesday's close.
The team said the upgrade was prompted by recent growth trends, potential for the gross volume of merchandise sold via Affirm to be higher than they are now forecasting, margin expansion, and interest- rate tailwinds, among other factors.
U.S. e-commerce is forecast to grow at an 8% compound annual growth rate from 2024 to 2027, while the BNPL market is anticipated to grow by 12.5%, analysts wrote.
"If the market trends persist through FY27 and AFRM can grow its market share from 35% now to 40% by F27 at the recent growth rate, we expect as much as +50% upside in GMV, revenue and adj. operating revenue compared to our current estimates," the team added.
Write to Emily Dattilo at emily.dattilo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 19, 2024 09:08 ET (14:08 GMT)
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