Affirm Holdings Extends Partnership with Stripe; RBC Maintains 'Sector Perform' Rating

Affirm Holdings, Inc. (AFRM) has extended its partnership with Stripe, introducing BNPL integration on Stripe Terminal. RBC Capital maintains its 'Sector Perform' rating and $75 price target, citing potential U.S. competition and a possible loss of Walmart volume. However, the company's strong EPS growth estimate and hedge fund interest secure its spot on the list of 15 Stocks That Will Benefit From AI.

Affirm Holdings, Inc. (AFRM) has further solidified its presence in the buy now, pay later (BNPL) market by extending its partnership with Stripe. The collaboration introduces BNPL integration on Stripe Terminal, enhancing the company's reach and accessibility for both U.S. and Canadian merchants. This integration is set to expand Affirm's offline merchant footprint and increase the accessibility of BNPL options at the point of sale.

The integration with Stripe Terminal allows Affirm to leverage over one million in-store devices, significantly broadening its merchant reach. This move aligns with Affirm's strategic focus on embedding flexible payment solutions directly within leading global payment infrastructure. The partnership not only supports broader merchant adoption but also underscores Affirm's commitment to driving growth in both digital and physical retail channels.

RBC Capital maintains its 'Sector Perform' rating and $75 price target for Affirm, acknowledging the potential challenges posed by U.S. competition and a possible loss of Walmart volume. However, the company's strong earnings per share (EPS) growth estimate and hedge fund interest have positioned Affirm among the 15 Stocks That Will Benefit From AI. The integration with Stripe Terminal is expected to bolster Affirm's merchant count and gross merchandise volume (GMV), which could further support its investment narrative.

While the integration with Stripe Terminal represents a significant short-term catalyst, investors should remain mindful of the long-term risks associated with competitive pressures and potential contract renegotiations. Affirm's ability to navigate these challenges and maintain strong merchant relationships will be crucial for achieving its projected revenue and earnings targets.

Affirm Holdings' outlook projects $5.6 billion in revenue and $376.0 million in earnings by 2028, requiring 23.1% annual revenue growth and a $438.2 million increase in earnings from its current earnings of $-62.2 million. The integration with Stripe Terminal is a step towards achieving these ambitious targets, but investors should carefully consider the broader competitive landscape and potential risks.

References:
[1] https://finance.yahoo.com/news/affirm-holdings-afrm-expands-stripe-101000172.html
[2] https://simplywall.st/stocks/us/diversified-financials/nasdaq-afrm/affirm-holdings/news/affirms-new-stripe-and-google-pay-integrations-might-change