FQ3 GMV beat the high-end of guidance by 6%; ex-Peloton growth was 97%. Affirm extended the Shopify Inc (NYSE:SHOP) exclusive agreement to June 8, 2025, and that Affirm would be adding an interest-bearing product during FQ4.
Chiodo continues to believe Affirm is well-positioned with many of the most critical eCommerce platforms/retailers in the U.S. (Amazon.com Inc (NASDAQ: AMZN), Shopify, Walmart Inc (NYSE:WMT), Target Corp (NYSE:TGT), Expedia Group, Inc (NASDAQ:EXPE), etc.), which will bolster Affirm's network effects (merchant & user adds).
Barclays analyst Ramsey El-Assal had an Overweight rating with a price target of $65. AFRM beat Street estimates across the board, particularly in gross profit (RLTC).
In addition, the company put to bed some persistent bear themes and announced break-even profitability sooner than investors expected. The company also announced a multi-year renewal of the SHOP relationship.
RBC Capital analyst Daniel Perlin maintained an Outperform and lowered the price target from $58 to $48. AFRM delivered solid FQ3/22 results in an otherwise challenging market and increased its FY22 guidance, which has proven to be a rare occurrence this earnings season.
Specifically, GMV came in ~7% above Perlin's forecast and in line with the revenue upside (~7%), while revenues less transaction expense beat our estimate by $39 million or ~27%.
Importantly, management highlighted a plan to achieve "sustained" adj. operating income profitability, on a run-rate basis, by the end of FY23, demonstrating the scale of its business model and management's willingness to achieve profitability.
Mizuho analyst Dan Dolev reiterated a Buy with a price target of $79. Following a great deal of anxiety, strong F3Q results should offer a big sigh of relief.
Dolev expects a very positive stock reaction. Following a rushed increase to the guide in March after the failed ABS offering, F3Q results exceeded expectations, with a higher FY guide on all significant fronts.
Key KPIs were solid, including rising overall take rates and a halt in the 2+ year in the decline of the highest quality borrowers in the mix. Small nuances like rising charge-offs and changing the goalposts on delinquencies may drive questions on the call.
Although Dolev was incrementally more bullish on Affirm and the Amazon partnership, the multiple reflects the recent double-digit decline in payments/fintech multiples and the rising risk of further delinquencies and charge-offs.
Price Action: AFRM shares traded higher by 24.5% at $22.46 on the last check Friday.