Affirm Holdings, Inc. AFRM, a fast-growing player in the buy now, pay later (BNPL) industry, presented at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco yesterday, offering insights into its recent performance and strategic direction. With the company’s plans to expand its reach and deepen consumer engagement, investors are now weighing their next move. Before diving into what option to choose for AFRM stock, let’s break down the key takeaways from the event.

Key Takeaways From the Morgan Stanley TMT Conference

Strong Growth Momentum

Affirm crossed the $31 billion volume mark over the past year. It now boasts more than 337,000 merchant partners and 21 million active consumers. Earlier, the company stated its fiscal 2025 Gross Merchandise Volume (GMV) guidance of $34.74-$35.34 billion. It expects revenues for fiscal 2025 to be in the range of $3.13-$3.19 billion. It also estimates adjusted operating margin around 22.5%-23.5% for the full year.

A Win-Win Ecosystem Drawing Merchants & Consumers

Affirm’s business model is designed to create value for both merchants (businesses that offer Affirm at checkout) and consumers (shoppers using Affirm to finance purchases). For retailers, Affirm reduces cart abandonment, boosts average order value and enhances customer retention — all without adding credit risk. On the consumer side, Affirm provides transparent, flexible financing that makes high-value purchases more accessible while avoiding traditional debt traps.

Growing Focus on International Expansion

The company started its operations in the U.S. market and then expanded to Canada a few years ago. Building on this success, it entered the U.K. market last November, aiming to use the region as a springboard for broader European expansion. Its global partners, many already operating in the U.K. and Europe, will likely facilitate a smoother expansion.

Product Diversification Beyond BNPL: A Smart Move?

Affirm is exploring debit products to complement its BNPL services, aiming to deepen customer engagement and integrate itself into consumers’ daily spending habits. This could include its debit cards or direct integrations with bank accounts, allowing users to access Affirm's payment flexibility beyond just BNPL transactions. This will likely make Affirm a more frequent payment option, not just for large purchases but also for everyday expenses. Diversifying beyond BNPL and expanding into categories beyond retail will help Affirm reduce reliance on a single revenue stream and expand its total addressable market.

Emphasis on Sustainable Growth & Profitability

Affirm is balancing growth with financial discipline, optimizing operations to improve margins and maintaining responsible underwriting practices. While Affirm is still in a growth phase, the company is showing more focus on financial sustainability and improving its path to profitability rather than purely chasing expansion at any cost. This is essential for long-term investor confidence. It achieved the GAAP profitability mark in the last reported quarter and expects to sustain that feat from the fourth quarter of fiscal 2025.

AFRM’s Price Performance & Valuation

Investors are optimistic about the company’s expansionary moves, which is reflected in its share price appreciation. Over the past six months, AFRM shares have surged 50.6%, outperforming the industry and the S&P 500 Index’s 22.3% and 8.7% growth, respectively. During this time, major digital payments service provider PayPal Holdings, Inc. PYPL lost 2.1%. Established financial giants in credit and debit card solutions like Visa Inc. V and Mastercard Incorporated MA gained 26.8% and 16.6%.

Price Performance – AFRM, PYPL, V, MA Industry & S&P 500

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In terms of valuation, the company is cheaply priced compared with the industry average. Currently, AFRM is trading at 4.91X forward 12-month sales, below the industry’s average of 7.06X. So, there’s more room to grow.

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Favorable Earnings Estimates for AFRM

The Zacks Consensus Estimate for fiscal 2025 earnings indicates an 89.2% year-over-year improvement, while the estimate for fiscal 2026 earnings implies a surge of 442.6%. Moreover, the consensus mark for fiscal 2025 and 2026 revenues suggests 36.9% and 23.8% year-over-year growth, respectively. It has delivered solid financial results lately, beating earnings estimates in each of the trailing four quarters, the average surprise being 84.1%.

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Should You Buy Affirm Stock Now?

Affirm’s expansion into the U.K. market and strategic alliances signal growth potential. The company’s innovative technology, consumer-friendly policies and strong North American foundation position it well for the long-term. Valuation metrics and optimistic earnings projections suggest it has room to grow.

Technical indicators also signal strength, with AFRM trading above its 200-day simple moving average, reinforcing its strong upward momentum. Additionally, the stock remains below Wall Street’s average price target of $76.41, suggesting a potential 23.52% upside from current levels.

Affirm Wall Street Price Target

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With a blend of value, growth potential and business diversification efforts, Affirm currently presents an attractive investment opportunity. The stock sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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