Affirm Holdings (AFRM) shares climbed roughly 11% in Friday trading after the buy-now, pay-later provider posted stronger-than-expected fiscal fourth-quarter results and delivered its most profitable quarter on record. The company's adjusted earnings per share came in at $4.62, well above the $3.77 analysts had projected.
Revenue reached $1.17 billion, surpassing the consensus estimate of $1.1 billion and marking a 33% year-over-year increase. Gross merchandise volume (GMV) rose 36% to $14.1 billion, extending Affirm's streak of 30%-plus GMV growth to 11 consecutive quarters. Revenue less transaction costs, a key metric for the company's underlying economics, advanced 39% to $589 million.
Reported net income hit $1.6 billion, boosted significantly by the release of a valuation allowance on most of its domestic deferred tax assets. The company also issued an upbeat outlook for fiscal 2027, projecting GMV of more than $64 billion, which would represent at least 27% growth from the approximately $50.2 billion expected in fiscal 2026. Affirm kept its revenue-less-transaction-costs take rate at about 4.16% of GMV, roughly in line with fiscal 2026 levels.
Analysts responded positively, with several raising price targets. BofA Securities lifted its target to $104 from $93, maintaining a Buy rating, implying nearly 35% upside from Friday's pre-market levels. The firm called Affirm's fourth-quarter beat and fiscal 2027 outlook conservative, noting management commentary suggested room for upside. BofA also highlighted potential growth drivers not included in current guidance, such as a possible bank charter, business-to-business operations, UK long-duration lending, and brand-sponsored promotions. The bank added that Affirm's card growth remains fully organic, with no contribution yet from its Fiserv bank issuance partnership.
UBS raised its price target to $90 from $82, keeping a Neutral rating. The firm noted that Affirm's first-quarter GMV outlook implies growth of around 30% at the high end despite difficult comparisons, including the shift of Prime Day from July to June in 2026 and the final two months of comparisons against the loss of Walmart volumes, which moved away from Affirm in September.
Needham increased its target to $100 from $90, retaining a Buy rating, citing Affirm's ability to execute across growth, profitability, credit, and funding. Citizens also reiterated a Market Outperform rating with an $85 price target.
The stock's recent run has been robust, with shares gaining about 65% over the past six months, bringing the company's market value to roughly $26 billion. Before Friday's move, the stock traded around $77.49, with analyst price targets ranging from $55 to $124. The combination of accelerating transaction volumes, improving profitability, and a relatively conservative fiscal 2027 outlook has strengthened the case for further gains, although the sharp rise also leaves investors with higher expectations.
For now, Affirm's ability to maintain GMV growth above 30% while expanding profitability appears to be giving investors confidence that its growth story remains intact. With price targets spread widely, many investors are likely to keep a close watch on Affirm in the weeks ahead. For more on Affirm's recent trading patterns, see our earlier pre-earnings analysis. Meanwhile, broader market moves, such as the Nasdaq's recent rally, continue to influence sentiment in the fintech sector.
This article is for informational purposes only and does not constitute financial advice.
