Affirms Holdings Stock Surges Premarket After Surprise Profit, Upbeat Q2 Revenue: Retail’s Extremely Bullish

Affirm Holdings (AFRM) stock gained 13.3% in premarket trade on Friday after the company reported a surprise quarterly profit and its revenue topped Wall Street estimates.

The firm reported a net income of $80.36 million, or $0.23 per share, for the fiscal second quarter, compared with a loss of $166.90 million, or $0.54 per share, in the year-ago quarter. 

Analysts were expecting a loss of $0.17 per share, according to Koyfin data.

The buy now, pay later firm’s revenue jumped 46.6% to $866.4 million, exceeding the Street estimate of $807.6 million.

The company said its gross merchandising volume (GMV), which implies the total value of all the transactions processed by Affirm, jumped 35% to $10.1 billion.

Affirm attributed the rise to strong performance in the general merchandise and consumer electronics categories due to the strong holiday shopping season.

Its active consumers rose 23% to 21 million, and its active merchant count grew 21% to 337,000.

The company said its direct-to-consumer GMV rose 43% to $2.8 billion, with active Affirm cardholder count rising about 20% quarter over quarter.

However, its allowances for credit losses rose to 5.4% from 5% in the year-ago quarter.

Affirm forecast fiscal 2025 revenue between $3.13 and $3.19 billion and GMV between $34.74 and $35.34 billion.

According to TheFly, following Thursday's earnings report, several brokerages raised the price target for the stock.

Wells Fargo raised its price target on the stock to $85 from $70. The brokerage said that while no particular key performance indicator outshined the rest, a broad-based strength would help drive the company’s earnings performance better than any other firm in its coverage.

Retail sentiment on Stocktwits moved higher in the ‘extremely bullish’ (92/100) territory than a day ago, while retail chatter remained ‘extremely high.’

One retail trader said that companies such as Affirm have emerged as the alternative for financial credit for many.

Over the past year, Affirm stock has gained 38.4%.

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