BTIG reiterated a Neutral stock rating on Affirm Holdings (NASDAQ: AFRM), citing mixed signals in the company's April trust data. The stock is currently trading at $65.22 with a market cap of $21.84 billion.
Early-stage delinquencies in the 30-59 day category declined month-over-month across all vintages. However, the 2025-X2 vintage shows elevated early-stage delinquency rates compared to historical norms, raising concerns.
BTIG noted that the higher delinquency rate may be intentional, as Affirm expects revenue less transaction costs (RLTC) margins to compress from above 4.0% due to higher loss expectations. This could allow Affirm to approve more loans and boost gross merchandise volume (GMV).
The strategy remains viable if RLTC margins stay within 3.75%-4.00% while GMV grows above 30% year-over-year. Affirm has demonstrated strong revenue growth of 32% over the last twelve months and turned profitable with diluted EPS of $1.06.
BTIG does not expect Affirm to loosen underwriting further to drive GMV growth, as this could push RLTC margins below guidance. The market should not expect significant beat-and-raise outcomes for GMV going forward.
In other news, Affirm integrated its BNPL options into Google Search and Gemini app via Google Pay. Compass Point raised its price target to $80, Mizuho to $100, Evercore ISI to $90, and Citizens to $85.
