Shares of Affirm Holdings, Inc. (NASDAQ: AFRM), a leading player in the digital payments and "Buy Now, Pay Later" (BNPL) sector, plunged 5.07% in Friday's intraday trading session. The significant drop comes amid growing concerns over the company's valuation and broader market volatility, despite Affirm's strong position in the rapidly expanding digital payments industry.

Affirm, which provides a platform for digital and mobile-first commerce, has been facing increased scrutiny from investors and analysts. While the company has shown impressive growth in its merchant network and active customer base, with a 21% increase in active merchants to 337,000 and a 23% year-over-year surge in active customers to 21 million as of December 31, 2024, concerns about its valuation persist. The stock's recent performance, returning -13.1% over the past month compared to the S&P 500's -6.1% change, reflects these worries.

Despite the current downturn, some analysts remain optimistic about Affirm's prospects. Goldman Sachs analyst Will Nance recently raised the price target for Affirm from $50 to $56, maintaining a Buy rating. This positive outlook is supported by the company's global expansion efforts, including its recent launch in the United Kingdom, and partnerships with major retailers like Walmart. However, the market's reaction suggests that investors are weighing these growth prospects against the company's current valuation and the broader economic landscape.