Affirm Holdings (AFRM) is in a position to expand its total addressable market, leveraging its buy-now-pay-later debit card and the company's new $4 billion capital investment from Sixth Street, Deutsche Bank said in a note emailed Monday.

The brokerage raised its price target on the stock to $75, while reiterating a hold rating. The new target represents an increase from Deutsche Bank's prior $45 target, according to FactSet data.

Analyst Bryan Keane said the more optimistic view follows a fireside chat held on Friday with Affirm Chief Financial Officer Rob O'Hare, in which they primarily discussed the "exciting opportunity ahead with the Affirm Card." The card is expected to continue rolling out to existing Affirm users and "should help expand" the company's total addressable market, Keane said.

Roughly 7% of Affirm's existing users use Affirm Card, accounting for roughly 8% of total gross merchandise volume in the September quarter, O'Hare told Keane, according to a FactSet transcript.

"It's a product that deepens the relationship with existing consumers," O'Hare said. "Most of our users on the Affirm Card side start with a what we call point-of-sale loan and then discover some of our direct-to-consumer offerings, whether it's our marketplace or Affirm Card. And they're using it for their second, third, fourth transaction."

The conversation also covered the macro environment, credit trends, profitability, competition within the buy-now-pay-later, or BNPL, space and the company's strategic roadmap, according to Deutsche Bank.
Affirm declined to provide a volume update on Black Friday and Cyber Monday spending but said it saw strength within travel and consumer electronics, which O'Hare said were verticals that are growing in the 40% to 50% range, according to the transcript. Those are "key indicators of consumer discretionary spend," Keane said.

O'Hare said that Affirm is growing "much faster" than e-commerce at large.

On Friday, Affirm announced a capital partnership with investment firm Sixth Street for up to $4 billion over the next three years, reflecting the payment company's largest-ever capital commitment. Deutsche Bank said this deal adds capacity to fund the growth of the company. The agreement includes additional off-balance sheet funding that enables Affirm to extend up to more than $20 billion in loans.

Affirm in November reported a fiscal first-quarter net loss of $0.31 a share, improved from a $0.57 loss the year earlier, and a 41% increase in revenue to $698.5 million.