Affirm's Q1 Earnings Report: Key Takeaways and Market Analysis

Affirm Holdings (AFRM) is preparing for its earnings report, with a high volume of options trading and expectations of a 9.3% stock movement. Historically, the stock has seen a 14.4% change post-earnings. The company has strong revenue growth but faces challenges in profitability, with a negative EPS and net margin. However, its operating margin and liquidity are positive indicators. Valuation metrics suggest a premium stock, with a high P/S and P/B ratio. Analysts have a moderate buy sentiment, with a target price of $192.

Affirm Holdings (AFRM), a leading fintech company offering buy now, pay later services and point-of-sale payment solutions, is set to release its quarterly earnings report on August 28, 2025. The stock has been trading with a high volume of options, with analysts expecting a significant 9.3% movement post-announcement. Historically, Affirm's stock has shown a 14.4% change following earnings reports [1].

Analysts anticipate Affirm to report an earnings per share (EPS) of $0.30, with bulls hoping for a beat and positive guidance for the next quarter. New investors should note that the stock's price is often more affected by guidance than by the actual earnings beat or miss [1].

Affirm's revenue growth has been robust, with a 35.92% increase in the last quarter, but the company faces challenges in profitability. It reported a negative EPS and net margin, though its operating margin and liquidity are positive indicators [1]. The company's valuation metrics suggest a premium stock, with a high price-to-sales (P/S) and price-to-book (P/B) ratio.

Analysts have a moderate buy sentiment, with a target price of $192, indicating a potential 2.13% downside from the current price [1]. The consensus rating is "Outperform," with 14 analysts rating the stock favorably [1].

The company's market capitalization is $25 billion, and it has generated $3.0 billion in revenue over the past twelve months, delivering $196 million in operating profit despite a net loss of $62 million [2]. Affirm's historical earnings reaction has been volatile, with a median decline of -10.9% and a steepest single-day drop of -22.6% over the past five years [2].

Affirm's Q2 2025 revenue surged 47% to $866 million, with $80.4 million net profit reversing a prior-year loss, driven by 35% GMV growth and a 23% active user increase [3]. However, risks include rising competition, regulatory scrutiny of the BNPL sector, and reliance on partnerships. The upcoming Q4 earnings report is critical to validate its stretched valuation and GAAP profitability timeline.

References:
[1] https://www.benzinga.com/insights/earnings/25/08/47358551/insights-ahead-affirm-holdings-quarterly-earnings
[2] https://www.forbes.com/sites/greatspeculations/2025/08/26/affirm-holdings-sell-afrm-stock-now/
[3] https://www.ainvest.com/news/affirm-q4-earnings-break-moment-bnpl-sector-star-2508/