By Emily Dattilo

Affirm Holdings has a bright future, but its quarterly report could prove disappointing, Susquehanna Financial Group argued on Monday.

Analysts James Friedman and Madeleine Zhou downgraded shares of the "buy now, pay later" company to Neutral from Positive and cut their forecasts for earnings and revenue but reiterated their target for the price of $57.

Affirm stock fell 1.7% to $57.01 in premarket trading.

"Consistent with the investment thesis we laid out during our initiation, we believe BNPL is growing in usage similar to the early days of debit," analysts wrote. "If this is the case the future looks bright with a long journey ahead."

That being said, there are two reasons to move to the sidelines, Friedman and Zhou argued.

First, shares have reached their price target. Second, data on U.S. online spending during the holiday season indicates that the portion of outlays made via BNPL didn't increase much from a year ago. That is a hint that Affirm's gross merchandise volume -- the dollar value of all transactions on the Affirm platform -- could be lower than Wall Street analysts expect.

Still, the team said it remains confident in the company's long-term ability to snap up market share from debit and credit.

Affirm is scheduled to file quarterly earnings on Feb. 6.

Write to Emily Dattilo at emily.dattilo@dowjones.com

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January 21, 2025 09:33 ET (14:33 GMT)

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