Affirm Holdings, Inc. (NASDAQ: AFRM), a platform for digital and mobile-first commerce, has witnessed a substantial increase in its stock surges following its integration with e-commerce giant Amazon (NASDAQ: AMZN). This integration allows Amazon customers to access Affirm’s Adaptive Checkout service, which offers flexible pay-over-time options without any additional costs or impact on credit scores. The move is expected to boost visibility, merchant adoption, and consumer adoption, potentially driving significant growth for Affirm.
Analyst Andrew Jeffrey from Truist points out that the integration with Amazon could have a significant impact on Affirm’s success, although quantifying the exact difference may be challenging.
A study conducted by RBC Capital Markets in 2021 revealed that buy-now-pay-later (BNPL) options, like those provided by Affirm’s Adaptive Checkout system, can increase conversion rates by approximately 20% to 30% and elevate average ticket sizes by as much as 50%. This data underscores the potential positive impact of Affirm’s collaboration with Amazon.
Institutional Investors Show Confidence in Affirm
Notable institutional investors have recently adjusted their holdings in Affirm. Norges Bank purchased a new stake in the company during the fourth quarter, while Vanguard Group Inc. increased its position in Affirm during the first quarter. State Street Corp and BlackRock Inc. also expanded their holdings, and Price T Rowe Associates Inc. MD raised its stake in the second quarter.
These moves by institutional investors indicate confidence in Affirm’s growth potential and its ability to capitalize on strategic partnerships such as the one with Amazon.
In terms of financials, Affirm reported better-than-expected earnings for the latest quarter. This quarter, an EPS of ($0.69) surpassed the consensus estimate of ($0.91). The company’s revenue for the quarter reached $380.98 million, a 7.4% increase year-over-year. Despite a negative net margin and a negative return on equity, Affirm’s revenue growth and the positive market response to its Amazon integration reflect the company’s potential for future success.
Current Status and Market Performance
Affirm’s stock (AFRM) opened at $16.20 and is currently trading at $16.91, representing a 6.88% increase. However, RSI indicators suggest that the stock may oversell, indicating a need for caution. The next earnings report is expected in 78 days. It will provide further insights into Affirm’s financial performance and growth trajectory.
In summary, Affirm’s integration with Amazon and the availability of its Adaptive Checkout service through Amazon Pay offer significant growth potential.
The positive response from institutional investors and better-than-expected earnings further bolster Affirm’s position in the market. At the moment, the company continues to expand its reach and leverage strategic partnerships. Therefore, Affirm is planning to capitalize on the increasing demand for flexible payment options in the digital commerce landscape.
