Affirm Holdings, Inc. AFRM has recently partnered with Stitch Fix, Inc. SFIX, an online personal styling service provider, to offer flexible pay-over-time options for fashion purchases. This collaboration adds Stitch Fix to Affirm’s extensive global network, which includes more than 337,000 merchants as of Dec. 31, 2024.

The partnership comes amid rising demand for buy now, pay later (BNPL) solutions in the fashion industry. From October to December, fashion sales through Affirm grew 20% year over year, and over the past six months, more than 45 fashion merchants joined Affirm’s network. As consumers continue to seek financial flexibility, Affirm is expected to expand its partnerships with more fashion retailers.

For Stitch Fix, integrating Affirm's payment plans — known for their transparency and absence of hidden or late fees — could help drive higher sales and larger order values. Following an 18.6% year-over-year decline in active clients to 2.43 million in the last reported quarter, this move will likely help attract and retain more shoppers.

The partnership also benefits Affirm by increasing its Gross Merchandise Value (GMV). In the last quarter, Affirm’s GMV rose 34.7% year over year to $10.1 billion, fueled by strong sales in general merchandise, travel and ticketing categories, as well as a robust holiday season. For fiscal 2025, management expects GMV to range between $34.74 billion and $35.34 billion.

With inflation raising costs in recent years, more consumers have turned to BNPL solutions for greater purchasing power. As interest rates stabilize, lower borrowing costs could further boost transactions and drive greater adoption of Affirm’s services.

AFRM’s Price Performance

Over the past year, shares of Affirm have surged 115.1% compared with the 15.3% growth of the industry it belongs to.

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Zacks Rank & Other Key Picks

Affirm currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the broader Business Services space are PayPal Holdings, Inc. PYPL and Visa Inc. V, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for PayPal’s current-year earnings of $5.02 per share indicates an 8% jump from the year-ago level. PYPL beat earnings estimates in each of the trailing four quarters, with the average surprise being 14.3%. The consensus estimate for current-year revenues is pegged at $32.98 billion, suggesting 3.7% year-over-year growth.

The Zacks Consensus Estimate for Visa’s current-year earnings indicates 12.4% year-over-year growth. V beat earnings estimates in each of the trailing four quarters, with the average surprise being 3%. The consensus estimate for current-year revenues implies a 10.2% year-over-year increase.

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Visa Inc. (V) : Free Stock Analysis Report

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Affirm Holdings, Inc. (AFRM) : Free Stock Analysis Report

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

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