Key Takeaways
- Oppenheimer started covering Affirm Monday, giving gave shares of the buy now, pay later provider an “outperform” rating.
- Analysts said they were impressed with the “advanced” and distinct underwriting models used by Affirm.
- They issued an $80 price target for Affirm stock, which tops the $75 average among analysts who follow Affirm and were polled by Visible Alpha.
Affirm’s underwriting technique sold Oppenheimer on the BNPL business. Now the bank’s analysts are among the most bullish on Wall Street.
Oppenheimer initiated coverage of the buy now, pay later (BNPL) provider Monday, giving the stock an “outperform” rating. The analysts gave Affirm (AFRM) a price target of $80, matching the highest targets listed by Visible Alpha and coming in above the $75 average tracked by the service.
Affirm evaluates each potential transaction, the analysts said, rather than making underwriting decisions once per person. The company, they wrote, is “widely regarded as having one of the more advanced underwriting models with the ability to evaluate each transaction in real-time and adjust loan terms and interest rates dynamically based on a number of merchant and consumer behavior factors.”
That, Oppenheimer said, helps the company “better manage delinquencies.”
BNPL firms are known for allowing customers to pay off purchases in interest-free installments, but many offer other short-term loans and payment processing services. They generally make money by charging merchants for their services, but several also offer consumers products that resemble those provided by traditional banks.
Affirm’s platform moved about $31 billion in gross merchandise volume in 2024 on behalf of 22 million active customers, Oppenheimer said. Affirm could gain market share as the BNPL sector expands, setting Affirm up to increase GMV by 35% and 27% respectively through the end of its next two fiscal years, according to analysts’ estimates, which would translate into operating income growth in the high 20% range, Oppenheimer said.
Affirm shares were recently trading for about $69. That’s about flat from where they were Friday and 13% above where they started 2025.