Affirm's Funding Is On Solid Ground But Has Its Risks, Analyst Says
Portfolio Pulse from Anusuya Lahiri
Wedbush analyst David J. Chiaverini maintains an Underperform rating on Affirm Holdings Inc (NASDAQ:AFRM) with a price target of $15. Chiaverini discussed Affirm's funding structure and potential risks, particularly regarding the technical structure of their ABS deals and the impact of breaching triggers. He outlined a scenario where breaching a trigger could lead to a loss of buyer appetite for future deals, potentially forcing Affirm to retain residual interests on the balance sheet. The analyst projects Q2 revenue and EPS of $514.9 million and $(0.86), respectively. AFRM shares were up 3.2% at $25.83.
November 22, 2023 | 7:09 pm
News sentiment analysis
Sort by:
Ascending
NEGATIVE IMPACT
Affirm Holdings Inc's stock may face short-term pressure due to the Underperform rating and the outlined risks associated with its ABS deals, despite a recent uptick in share price.
The Underperform rating by Wedbush suggests a bearish outlook on Affirm's stock. The detailed risks associated with the ABS deals and the potential long-term impact of breaching triggers could deter investors, despite the current positive price action. The projected Q2 revenue and EPS indicate financial performance that may not align with the current stock price, adding to the potential downside risk.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 90