NEW YORK - Affirm Holdings Inc. (NASDAQ:AFRM) saw its shares soar more than 21% after the buy-now-pay-later company reported better-than-expected fourth-quarter results and provided upbeat guidance for the current quarter.
The fintech firm posted an adjusted loss of -$0.14 per share for the quarter ended June 30, significantly narrower than analysts' estimates of -$0.51 per share. Revenue jumped to $659.19 million, surpassing the consensus forecast of $603.67 million and marking a 45% increase YoY.
Affirm's strong performance was driven by robust growth in gross merchandise volume (GMV) and active merchants. The company reported a 42% YoY increase in transactions to 24.7 million in the fourth quarter, while its active merchant count exceeded 300,000.
Looking ahead, Affirm provided an optimistic outlook for the first quarter of fiscal 2025, projecting revenue between $640 million and $670 million. The midpoint of this guidance range is above the analyst consensus of $624.6 million.
Following the report, Morgan Stanley (NYSE:MS) analysts said AFRM showed "impressive execution" in the quarter, but they believe the stock's valuation remains "stretched."
"AFRM will likely trade on near-term consumer sentiment expectations and estimate revisions and AFRM is executing well, but the blue-sky long-term valuation frameworks yield little to no upside from current trading levels, skewing risk-reward to the downside," they wrote, reiterating an Underweight rating on the stock.
Meanwhile, Mizuho analysts said Affirm delivered a "killer quarter," echoing the comments by the company's CEO.
They highlighted that "the notion that the guide is still conservative should help turn bears into bulls."
Max Levchin, Affirm's CEO, expressed confidence in the company's trajectory, stating, "We intend and expect to be profitable on a GAAP basis in our fourth fiscal quarter, and plan to operate the business while maintaining GAAP profitability thereafter."
The company also highlighted its expanding network reach, noting that it now partners with the top three brands and commerce platforms in the U.S. by market share. Affirm expects to be natively integrated into four of the top digital wallets in North America by the end of this calendar year.
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