The last time we mentioned Affirm Holdings (AFRM), it traded at $32.96 on June 24.

After hitting a high of $80.72 in February, the buy now, pay later stock has again become an opportunity at its oversold price of $37.57. It’s also oversold on RSI, MACD and Williams’ %R and could soon refill its bearish gap at around $48 again shortly. 

Helping, analysts at TD Cowen just initiated a buy rating on the stock with a $50 price target, noting that AFRM is well-positioned for growth. 

All thanks to its “robust partnerships with major e-commerce platforms such as Amazon and Shopify. These partnerships enhance Affirm’s ability to capture market volume effectively. Furthermore, Affirm’s comprehensive point-of-sale lending capabilities and consumer-friendly practices set it apart from its competitors.,” according to the firm, as noted by TipRanks.com.

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Bank of America also says the pullback in Affirm is overdone. “We continue to view Affirm as a long-term beneficiary in BNPL and expect the industry to continue gaining share within ecommerce over time,” said the firm, as quoted by Seeking Alpha.

Compass Point analysts upgraded the AFRM stock to a buy, also calling the recent pullback overdone, with a price target of $64.

BMO Capital also resumed coverage with an outperform rating with a price target of $69.

“We expect gross merchandise value/revenue less transaction costs to surprise positively (despite modest impact from Klarna-OnePay); potential credit headwinds already anticipated,” said the firm.

We also have to consider that the global BNPL market is expected to surpass $560 billion this year and could be worth about $911.8 billion by 2030, according to Research and Markets. 

Recent earnings weren’t too shabby either.

In its most recent quarter, the company’s EPS of 23 cents beat by 40 cents. Revenue of $866.38 million, up 46.6% year over year, beat by $58.75 million. 

Also, as noted by Seeking Alpha: “The buy now, pay lender platform expects fiscal-year 2025 gross merchandise volume of $34.7B-$35.3B, compared with the prior target of more than $34B and the $34.6B Visible Alpha consensus. Revenue for FY25 is anticipated to be $3.13B-$3.19B, also surpassing the $3.11B average analyst estimate. It also sees transaction costs totaling $1.71B-$1.74B (vs. $1.74B Visible Alpha estimate), and adjusted operating margin of 22.5%-23.5% (vs. at least 20% in prior view).”

In short, we’d use weakness as an opportunity to buy AFRM.

Sincerely,

Ian Cooper