Affirm Holdings Surges to 155th in Trading Volume with $532 Million in Shares Traded Despite Stock Price Decline

On July 11, 2025, Affirm Holdings (AFRM) experienced a significant surge in trading volume, with a total of $532 million in shares traded, marking a 91.81% increase from the previous day. This surge placed Affirm at the 155th position in terms of trading volume for the day. However, despite the high trading volume, Affirm's stock price declined by 5.58%, marking the second consecutive day of decline and a total decrease of 6.30% over the past two days.

Affirm's strategic shift towards everyday transactions, driven by partnerships with retailers like Costco, has sparked debate about its long-term viability in the crowded Buy Now, Pay Later (BNPL) market. The company's third-quarter fiscal 2025 results showed that 94% of transactions originated from repeat customers, with total transactions surging 45.6% year-over-year to 31.3 million. This momentum is attributed to partnerships with retailers like Costco, which now offers Affirm's flexible payment plans for purchases over $500. The collaboration targets high-frequency, lower-ticket items—such as appliances or seasonal gear—while maintaining Affirm's core value proposition of transparency and credit discipline.

Affirm's focus on repeat customers reduces reliance on costly customer acquisition, while its Revenue Less Transaction Costs (RLTC) margin of 4.1%—exceeding its 3-4% long-term target—reflects stronger profitability per transaction. This strategy contrasts sharply with rivals like PayPal and Block, whose BNPL offerings often prioritize volume over unit economics. Affirm's edge lies in its brand equity as a “honest” financial partner, avoiding aggressive marketing of high-interest loans and instead subsidizing 0% APR plans through merchant partnerships. This model aligns with consumer demand for clarity, as seen in its Affirm Card's 136% year-over-year user growth.

However, Affirm's merchant network faces risks. Costco's Q2 2025 sales growth underscores the partnership's potential, but retaining top retailers in a competitive landscape—where rivals are aggressively expanding—remains a challenge. Affirm's forward price-to-sales (P/S) ratio of 5.66 trades slightly below the fintech industry average, suggesting undervaluation relative to its 101.8% FY25 earnings growth forecast. Yet, its debt levels and reliance on merchant subsidies pose headwinds. CFO Rob O'Hare's emphasis on “core business fundamentals” over one-time gains is reassuring, but profitability targets for Q4 2025 remain ambitious.

Investors should monitor Affirm's margin trends and debt resolution closely. The company's future is tied to proving it can grow profitably in a space where cost discipline is key. Affirm's pivot to everyday purchases is strategically sound, leveraging repeat customers and transparency to differentiate itself. Its valuation offers a margin of safety, and the bullish earnings forecast is encouraging. However, marginal profitability and debt management will determine if this growth is sustainable. For now, a “Hold” stance makes sense until Affirm demonstrates consistent margin expansion and reduced reliance on debt. A “Buy” signal could emerge if its Q4 results hit 4% GMV growth guidance and merchant partnerships continue to scale.