Affirm Holdings Surges 5.07% on Earnings Turnaround, $460M Volume Ranks 242nd in U.S. Market

Market Snapshot

Affirm Holdings (NASDAQ: AFRM) closed 5.07% higher on November 12, 2025, with a trading volume of $460 million, ranking 242nd in U.S. market activity for the day. The stock, which reached a 52-week high of $92.18 in September 2025, currently trades at $77.95, reflecting a 15.4% discount to its peak and a 24.7% gain year-to-date. The surge followed the company’s Q1 fiscal 2026 earnings report, which marked a turnaround from a $0.31-per-share loss in the prior-year quarter to a $0.23-per-share profit, alongside 33.6% year-over-year revenue growth to $933.3 million.

Key Drivers Behind the Rally

Affirm’s recent performance was catalyzed by its Q1 fiscal 2026 earnings release, which exceeded analyst expectations on both the top and bottom lines. The company reported adjusted earnings per share (EPS) of $0.23, more than double the consensus estimate of $0.11, driven by a 23-percentage-point expansion in pre-tax profit margins compared to the same period in 2024. Revenue growth of 33.6% to $933.3 million underscored the firm’s ability to capitalize on its “buy now, pay later” model, with Gross Merchandise Value (GMV) surging 42% to $10.8 billion. This outperformance was attributed to robust transaction volume growth, fueled by repeat customer activity and expanded merchant partnerships, including direct point-of-sale integrations and wallet collaborations.

The earnings report also highlighted structural improvements in Affirm’s cost structure. Operating expenses rose 4.6% year-over-year to $869.7 million but were offset by a 46% decline in sales and marketing costs. Adjusted operating income soared 103.6% to $264 million, with margins expanding to 28.3% from 19.0% in the prior-year period. This efficiency gain was critical in bolstering investor confidence, as it demonstrated Affirm’s capacity to scale revenue while tightening expense controls. Additionally, the company’s provision for credit losses, which rose 1.8% year-over-year to $162.8 million, remained within acceptable levels relative to the surge in GMV and transaction volumes.

Beyond operational metrics, Affirm’s forward guidance further reinforced the positive sentiment. The company projected Q2 fiscal 2026 GMV between $13 billion and $13.3 billion, with revenue expected to range from $1.03 billion to $1.06 billion. For the full fiscal year 2026, management raised its GMV outlook to over $47.5 billion, up from $46 billion previously, while maintaining a revenue margin of 8.4% of GMV. These forecasts suggest a continued focus on volume-driven growth, supported by the 30% year-over-year increase in active merchants to 419,000. The expansion of the merchant base, coupled with the 52.2% growth in total transactions to 41.4 million, signals Affirm’s success in embedding its payment solutions into broader consumer and merchant ecosystems.

Analyst sentiment also contributed to the stock’s upward trajectory. Mizuho upgraded Affirm to an “outperform” rating, raising its price target from $70 to $108, while the broader analyst community assigned a “Moderate Buy” rating with an average target of $86.78. These upgrades coincided with Affirm’s earnings report, reflecting confidence in its ability to maintain momentum in a competitive buy-now-pay-later (BNPL) market. However, the stock’s 5.07% gain on the day, while significant, was tempered by historical volatility; Affirm has experienced 56 moves of over 5% in the past year, indicating that the market views the earnings report as impactful but not transformative.

The rally was further underpinned by macroeconomic tailwinds. With interest rates stabilizing and consumer confidence rebounding, demand for BNPL services has remained resilient. Affirm’s card network revenues, which surged 46% year-over-year to $69.3 million, benefited from increased usage of its Affirm Card and virtual payment solutions. This diversification into recurring revenue streams—such as card network fees—reduces reliance on GMV growth alone, offering a more sustainable path to profitability in a maturing market.

In summary, Affirm’s stock performance reflects a confluence of strong operational execution, improved cost discipline, and a favorable macroeconomic environment. While the company faces challenges, including elevated credit losses and competitive pressures in the BNPL sector, its ability to scale GMV, expand merchant relationships, and refine its cost structure positions it to capitalize on its market leadership. The recent analyst upgrades and revised guidance suggest that investors are increasingly confident in Affirm’s long-term growth trajectory, despite its current valuation discount to historical highs.