Key Takeaways
- Affirm reports fiscal first-quarter results after the close on Thursday, Nov. 5, two days after Shopify fell 15% on a small third-quarter GMV miss.
- Shopify’s GMV still grew 29% and PayPal raised its full-year guidance, so online spending is not Affirm’s main problem.
- The bigger risk is what credit costs: Upstart cut its full-year outlook, blaming worse consumer credit and higher rates, and Block’s lending losses grew three times as fast as its gross profit.
- At 19x forward earnings, well below its usual multiple, Affirm mostly has to hold its guidance and keep its delinquencies in check.
Affirm (AFRM) reports its fiscal first-quarter results after the close on Thursday, and this week has given its investors two reasons to be nervous.
The first came Tuesday. Shopify (SHOP) sank 15% after its third-quarter GMV and subscription revenue came in below estimates. Affirm runs Shop Pay Installments, the pay-over-time option at Shopify’s checkout.
The second matters more. Upstart (UPST), which like Affirm relies on outside investors to fund its loans, fell 7% Monday after BofA cut its price target. Then on Tuesday it lowered its own full-year outlook.
Not every report this week was a warning, though. PayPal (PYPL) and Block (XYZ), which compete with Affirm at the checkout through PayPal’s Pay Later and Block’s Afterpay, both raised their full-year guidance.
TIKR tracks 36 analysts on Affirm. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Affirm, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Affirm’s Analyst Ratings
Shopify’s miss was small
Shopify’s GMV grew 29% to $119.1 billion, against the $120.1 billion analysts expected. That’s a miss of less than 1%, and revenue grew 32%, in line with estimates. The stock fell because a name up 35% this year needed a beat, and it only matched.
PayPal’s quarter points the same way. Its total payment volume grew 6% to $487.1 billion in the third quarter, and it raised its full-year non-GAAP EPS guidance to about $5.60 from about $5.38. That doesn’t look like online spending cracking.
So I don’t read Shopify’s miss as a threat to Affirm’s volume. Affirm’s GMV jumped 36% in its June quarter. For this quarter it guided to $13.7 billion to $14.0 billion, up 27% to 30% from $10.8 billion a year earlier.
Credit and funding are the real test
Upstart’s quarter was strong on its own terms: originations rose 44% to $4.1 billion and revenue rose 34% to $371 million. But it cut its full-year revenue and adjusted EBITDA outlook. CEO Paul Gu said in the release that “Macro is putting pressure on our near-term outlook.”
That’s the warning for Affirm, which sold $21.9 billion of loans to outside investors in fiscal 2026. Affirm’s cost of funds fell about 103 basis points in a year, to 5.8% in the June quarter. Its fiscal 2027 outlook assumes short-term rates rise, though. The number to watch is revenue less transaction costs (RLTC), which is what Affirm keeps after credit losses, funding and processing. It guided to $575 million to $590 million for the quarter.
Block’s quarter answers the demand question. Its consumer lending originations grew 40% to $19 billion in the third quarter, and Afterpay’s post-purchase originations more than tripled from a year earlier. But its transaction and loan losses rose 66%, three times as fast as its gross profit.
Shoppers clearly still want to pay over time. What Affirm has to show is that its losses aren’t growing faster than its loans. Its 30-day delinquency rate on monthly loans was 2.5% at June 30. The September quarter usually runs higher, and a year ago it was 2.8%. A reading at or under that would put Affirm well ahead of what Upstart just described.
Analysts keep raising the bar
Analysts expect Affirm’s normalized EPS to climb from $3.85 in fiscal 2027 to $5.02 in fiscal 2028 (its fiscal years end in June):
Fiscal 2026’s spike came from a one-time, non-cash tax benefit of $1.4 billion. Analysts have raised their EPS estimates since June, by 2% for fiscal 2027 and 6% for fiscal 2028. Nothing in Shopify’s quarter gives them a reason to reverse that, but an Upstart-style cut to the outlook would.
Revenue has grown more than 30% from a year earlier in each of the last four quarters:
This quarter’s guidance of $1.19 billion to $1.22 billion would be growth of 28% to 31% from $933 million a year earlier.
Holding the guide is enough
Affirm trades at 19x forward earnings. That’s well below its 28x quarter-end average since its multiple turned positive in September 2024, and above its March 2026 low of 12x.
So the stock isn’t priced for a blowout. Affirm needs RLTC inside its guidance range and delinquencies near last year’s level. It also needs to keep its full-year guidance of more than $64.0 billion of GMV.
I think it gets there. Online volume held up this week, and Affirm says recent loan cohorts are tracking lifetime losses of about 3.5%, in line with what it expected. At 19x, holding the guidance should be enough to make the stock look cheap.
Of course, Upstart blamed the economy, and the economy reaches every lender. If Affirm trims its full-year outlook for the same reasons, the multiple could compress quickly.
So what is Affirm stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Affirm could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
