Affirm Shares Surge 16% on Revenue Beat, Surprise Profit During Holiday Period

Affirm Holdings, Inc. (AFRM) shares soared 16% on Friday, following the company's fiscal 2025 second-quarter earnings report, which revealed a surprise profit and revenue beat during the holiday period. The buy now, pay later (BNPL) company reported revenue of $866 million, up 46.6% year over year, and a net profit of $0.23 per share, compared to a loss of $0.54 per share in the year-ago period. Wall Street analysts had expected revenue of $807 million and a net loss of $0.15 per share.



Contributing to this strong performance was another record-setting holiday shopping season, with several standout categories. According to Affirm CEO Max Levchin, "during/, third-party marketplaces grew 44%, and travel 42%." The company's gross merchandise volume (GMV) grew 34.7% year over year to $10.1 billion, topping analysts' expectations of $9.6 billion.



For its fiscal third quarter, Affirm expects to achieve revenue in the range of $755 million to $785 million, with the midpoint of $770 million just short of the $772 million in revenue Wall Street is anticipating. The company also provided a more detailed forecast for its full-year guidance, calling for GMV in the range of $34.74 billion to $35.34 billion and revenue of $3.13 billion to $3.19 billion.



Susquehanna analyst James Friedman raised his price target to $65 from $57 following the earnings release, citing factors such as unique partnerships, broad and growing adoption of Affirm's card, and increased popularity of its 0% APR product. However, Friedman maintained a Neutral rating on the stock, citing valuation concerns.



Heading into Friday's session, Affirm Holdings was up more than 42% year over year, outpacing the S&P 500's total return of 24.5%. Unsurprisingly, Wall Street is mostly bullish on the financial stock, with the average analyst target price for AFRM stock being $70.79, representing implied upside of about 15% to its February 6 close. The consensus recommendation is a Buy.

In conclusion, Affirm's strong holiday shopping season performance, driven by record-setting categories and strategic partnerships, has led to a surge in its stock price. The company's revenue beat and surprise profit, coupled with optimistic guidance, have analysts bullish on the stock. However, some analysts caution that the share price has rallied too far, too fast, and maintain a Neutral rating based on valuation concerns.