Affirm Stock to Gain From Value-Driven Holiday Shopping: Here’s How

Affirm Holdings, Inc. AFRM recently shared research findings showing that 71% of Canadians plan to maintain or increase their holiday spending this year despite economic challenges. However, shoppers are adopting a more thoughtful approach, focusing on meaningful purchases, seeking the best deals, and using flexible payment options like buy now, pay later (BNPL) to better manage their budgets.

The research reveals that 77% of consumers are adopting a “slow shopping” approach, taking extra time to evaluate whether a purchase is truly necessary. Additionally, 59% plan to complete their purchases on or after Black Friday, spreading their shopping across December. This strategy will likely help shoppers secure the best deals, explore promotions, and compare brands and styles.

Nearly 50% are using BNPL options to manage budgets effectively. Many shoppers are tilting towards 0% APR financing options without hidden fees and compound interests for shopping over traditional discounts. As consumers prioritize budgeting, value-driven shopping, and avoiding credit card debt, Affirm’s payment plans have become more appealing. This will drive higher transaction volumes on its platform.

Retailers offering such flexible and transparent payment options are better equipped to capture a greater market share. By addressing the demand for such services, Affirm has managed to rapidly grow its merchant network. Recently, it integrated JD Sports into AFRM’s extensive network of more than 320,000 merchants, including Amazon, Peloton, American Airlines, SeatGeek and others.

Over the past year, shares of Affirm have surged 108.7% compared with the 31.2% growth of the industry it belongs to.

Image Source: Zacks Investment Research

Affirm currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Business Services space are Coinbase Global, Inc. COIN, Cantaloupe, Inc. CTLP and DLocal Limited DLO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Coinbase’s current-year earnings of $5.39 per share indicates a massive jump from the year-ago level of 37 cents. COIN beat earnings estimates in three of the trailing four quarters and met once, with the average surprise being 341.4%. The consensus estimate for current-year revenues is pegged at $5.6 billion, implying 80.6% year-over-year growth.

The Zacks Consensus Estimate for Cantaloupe’s current-year earnings indicates a 113.3% year-over-year surge. CTLP beat earnings estimates in two of the trailing four quarters, met once and missed on the other occasion, with the average surprise being 20%. The consensus estimate for current-year revenues implies 15.9% year-over-year growth.

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