AFRM Stock: Confirming results with top estimates, and forward-thinking guidance after a significant run

AFRM Stock: Confirming results with top estimates, and forward-thinking guidance after a significant run

Consumer Finance Company Confirm Holding (AFRM) reported a smaller-than-expected loss in the December quarter while revenue and other financial metrics beat Wall Street targets. The company’s guidance for AFRM stock came in above expectations, but perhaps not good enough after the big rally.

The San Francisco-based company reported its fiscal second-quarter earnings after the market closed on Thursday. On the stock market today, AFRM stock fell 1.1% to 48.64 in morning trading.

“We remain encouraged by the company’s growth trajectory, stock gains and ability to manage profitable growth in a rising interest rate environment,” RBC Capital analyst Daniel Berlin said in a report.

In its confirmed earnings report, the company reported a loss of 54 cents per share for the three months ended December 31. This compares to a loss of $1.10 per share in the same period of the previous year. Analysts polled by FactSet had expected a loss of 72 cents per share.

Affirm said revenue rose 48% to $591 million versus estimates of $521 million. Revenues less transaction expenses were $242 million, up 68%, versus estimates of $198.1 million.

The company said gross merchandise volume rose 32% to $7.5 billion versus estimates of $6.95 billion. The new confirmation card brought in $400 million in GMV.

Inventory confirmation: GMV guidance edges by views

For the current March quarter, Affirm said it expects revenue of $540 million at the midpoint of its forecast versus estimates of $488 million. It expected the total value added to reach $5.9 billion, exceeding estimates of $5.78 billion.

AFRM stock is up 270% over the past 52 weeks ahead of its fiscal second-quarter earnings release.

Affirm is one of the largest companies that offer buy now, pay later installments. With BNPL options, consumers pay off their purchases in monthly installments, with either low interest or no interest at all. It also emphasizes expansion into other financial services.

AFRM’s January 2021 initial public offering of shares raised $1.2 billion. Affirm gets most of its revenue from transaction fees paid by online retailers. In addition, Affirm gets about a third of its revenue from interest income paid by consumers.

Heading into a confirmed earnings report, the stock has a Relative Strength Rating of 99 out of a top 99, according to IBD Stock Screener.

Follow Reinhart Krauss on X, formerly known as Twitter, @reinhardtk_tech For updates on artificial intelligence, cybersecurity, and cloud computing.

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