Affirm Holdings Selloff Is 'Baffling': Analysts Dive Into Financial Results
Portfolio Pulse from Priya Nigam
Affirm Holdings Inc (NASDAQ:AFRM) experienced a notable selloff, dropping over 9% after its fiscal third-quarter results, despite beating earnings expectations and announcing a positive GMV outlook for the fiscal fourth quarter. Analysts from JPMorgan, Goldman Sachs, Mizuho Securities, and Needham provided their insights, with JPMorgan upgrading the stock from Neutral to Overweight and raising the price target. The selloff was seen as 'baffling' by some, given the company's performance and the milestone of surpassing one million active Affirm Card holders. The decline was also attributed to a negative reaction in sympathy with Shopify Inc's (NASDAQ:SHOP) stock drop, despite Affirm's limited exposure to Shopify's performance.
May 09, 2024 | 3:53 pm
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NEGATIVE IMPACT
Shopify Inc's stock drop on soft guidance and operational expenditure concerns likely influenced Affirm Holdings' stock performance, despite Affirm's limited exposure to Shopify.
Affirm's stock decline following its earnings report was partly attributed to a negative reaction in sympathy with Shopify's performance, despite Affirm having a diversified merchant base.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
Amazon.com, accounting for about 20% of Affirm's gross merchandise value, was mentioned as a significant partner, contrasting with the impact of Shopify's performance on Affirm's stock.
Amazon's role as a major partner for Affirm was highlighted to contrast the impact of Shopify's performance, suggesting a diversified and robust merchant base for Affirm.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 30
POSITIVE IMPACT
Affirm Holdings Inc saw a significant selloff despite beating Q3 earnings expectations and announcing a positive GMV outlook, with an upgrade from JPMorgan and a price target increase from Goldman Sachs and Mizuho Securities.
The selloff appears to be an overreaction to the earnings report and possibly influenced by external factors like Shopify's performance. The upgrades and positive analyst outlook suggest a strong short-term recovery potential.
CONFIDENCE 90
IMPORTANCE 95
RELEVANCE 100