Affirm Upgraded To Outperform As Wolfe Sees ‘More Compelling’ Valuation After Strong Q4

According to TheFly, Wolfe Research turned more constructive on Affirm after its fiscal fourth-quarter results, arguing that the company’s valuation has become more compelling.

• Wolfe continues to view Affirm as a structural winner, sets target price at $80
• Affirm stock’s risk/reward is now more favorable, says the firm according to TheFly.
• The company’s revenue in the fourth quarter grew 33% to $1.17 billion, beating FiscalAI's estimate.

Affirm Holdings, Inc. (AFRM) was upgraded to 'Outperform' from 'Peer Perform' at Wolfe Research, with the firm setting a $90 price target and pointing to a more favorable risk/reward setup, according to TheFly.

Affirm’s valuation has become “more compelling” at current levels since what the analyst described as a “strong” fiscal fourth-quarter (Q4) report, per TheFly. The firm also reiterated its view that Affirm remains a “structural winner.”

AFRM stock was up more than 2% in Monday’s premarket, on track to extend previous session’s gain of 5%.

Why Affirm's Q4 Impressed Analysts

Affirm’s "strong" Q4 results provide some context for Wolfe’s view. The fintech company's Q4 gross merchandise volume (GMV) increased 36% year over year to $14.1 billion. Its revenue grew 33% to $1.17 billion, beating FiscalAI's estimate by 5%. 

The firm's adjusted operating income rose 49% to $353 million, and adjusted operating margin expanded to 30% from 27% a year earlier. 

Growth was also broadening beyond traditional checkout integrations. Data showed that Affirm's Direct-to-consumer (D2C) GMV rose 49% to $4.7 billion, driven by Affirm Card GMV, which more than doubled to $2.8 billion. Active Affirm Card consumers also more than doubled to 5.2 million.

Affirm Targets Further Growth In FY27

For fiscal 2027, Affirm expects more than $64 billion in GMV, up from approximately $49.4 billion in fiscal 2026. The company also forecasts an operating margin above 14.5% and an adjusted operating margin above 30.5%. For the first quarter, Affirm guided revenue to $1.19 billion to $1.22 billion and GMV to $13.7 billion to $14.0 billion.

Wolfe’s upgrade therefore comes after a quarter that combined rapid transaction growth with higher profitability, while the company is guiding for further GMV expansion and margin improvement in fiscal 2027.

AFRM Stock: What Is Retail Mood

Meanwhile, retail investor sentiment around AFRM stock remained ‘bearish’ on Stocktwits.

So far this year, Affirm shares have fallen over 3%, underperforming the benchmark S&P 500, which has risen nearly 12% during this period.

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