On Monday, Mizuho (NYSE:MFG) Securities exhibited confidence in Affirm Holdings Inc. (NASDAQ:AFRM) shares, adjusting its price target on the company's stock to $69, an increase from the previous $65, while maintaining an Outperform rating. The revision follows Affirm's recent announcement of their first-quarter financial results for fiscal year 2025.
Affirm's first-quarter performance has sparked investor interest, particularly regarding three key areas: the reported rise in F2Q Return on Loan Capital (RLTC) as a percentage of Gross Merchandise Volume (GMV), the company's expansion efforts in the United Kingdom (TADAWUL:4280), and the potential long-term benefits of the Affirm Card. These areas of focus have been central to discussions following the earnings report.
The updated stock price target reflects not only the company's current financial outcomes but also the strategic moves it is making, such as scaling operations in the UK market. The analyst's commentary suggests that these developments are creating a positive outlook for the company's future growth and profitability.
In addition to the raised price target, Mizuho has updated its model for Affirm to incorporate the latest first-quarter results. This adjustment indicates a reassessment of the company's valuation based on recent performance metrics and expected future trends.
Affirm Holdings Inc. is being closely watched by investors as it continues to navigate the competitive financial technology landscape. With the affirmation of an Outperform rating and a higher price target, Mizuho signals its belief in the company's ability to excel and deliver value to its shareholders.
In other recent news, Affirm Holdings reported a strong first quarter during their latest earnings call. The company's Chief Operating Officer, Michael Linford, highlighted improvements in revenue as a percentage of Gross Merchandise Volume (GMV), driven by interest income, capital market benefits, and merchant fees.
Adjusted operating income margins are projected to be between 21% and 23%. Affirm also anticipates Real Lender Total (EPA:TTEF) Cost (RLTC) margins around 3.8% for Q2, expecting stronger performance later in the year.
In addition to its financial performance, Affirm is preparing for a UK market launch, aiming to meet the demand for long-term payment products. The company's CEO, Max Levchin, expressed confidence in the firm's strategic initiatives and competitive pricing strategy.
In other developments, Visa (NYSE:V) has collaborated with Affirm to introduce a new payment feature in the United States called "Flexible Credential." This feature allows users to access multiple accounts and funding sources with one card, a service that 51% of card users showed interest in, according to a Visa study. The partnership between Visa and Affirm signifies the evolving landscape of financial services, meeting the changing needs of consumers.
InvestingPro Insights
Affirm Holdings Inc. (NASDAQ:AFRM) has been making waves in the fintech sector, as reflected in Mizuho Securities' recent price target upgrade. This optimism is further supported by InvestingPro data, which reveals a robust revenue growth of 46.55% over the last twelve months as of Q1 2025, aligning with the company's expansion efforts mentioned in the article.
InvestingPro Tips highlight that Affirm's stock has shown a "Strong return over the last three months," with data indicating an impressive 97.36% price total return over this period. This performance underscores the market's positive reaction to Affirm's strategic moves, including its UK expansion and the potential of the Affirm Card.
However, investors should note that despite the strong revenue growth, Affirm is "Not profitable over the last twelve months," according to another InvestingPro Tip. This aligns with the article's focus on the company's future growth potential rather than current profitability.
For a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide deeper insights into Affirm's financial health and market position.
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