Wall Street analysts have expressed their favorable opinion of buy-now-pay-later services company, Affirm Holdings Inc., but many of them anticipate a significant pullback in the stock’s value in 2024. Despite soaring over five-fold this year, analysts predict a correction due to its staggering growth.
Affirm, a prominent player in the financial technology industry, has experienced a surge in popularity during the holiday season. Increasing numbers of consumers, disenchanted with rising inflation and borrowing costs, are turning to the flexible delayed-payment options offered by buy-now-pay-later (BNPL) providers.
Since the beginning of the year, Affirm’s stock (AFRM, -1.81%) has skyrocketed by an impressive 420.7%, including a remarkable 186% increase since October alone.
Check this out: Walmart expands buy-now-pay-later option to include self-checkout purchases, propelling Affirm’s stock even higher.
According to Truist analyst Andrew Jeffrey, BNPL volume on Cyber Monday, which follows the Thanksgiving weekend, surged by 42.5% compared to the previous year. Consumers were attracted to payment flexibility and veered away from traditional bank cards, as reported by The Financial Brand, a financial services trend analysis platform. BNPL accounted for 8% of all spending on Cyber Monday, up from 6.5% during Amazon Prime Day just four months earlier.
Recommended: BNPL trends appear promising, winning over even those who were skeptical about Affirm’s stock.
Also worth noting: Affirm impresses with narrowing loss and substantial revenue beat in recent earnings report.
Despite the positive outlook on BNPL, Andrew Jeffrey stands among the few Wall Street analysts who advise purchasing Affirm’s stock at current levels.
Out of the 19 analysts surveyed by FactSet, only six are bullish on Affirm, while eight remain neutral, and five adopt a bearish stance. The average 12-month price target for the stock is $29.24, indicating a potential 42% decline from its current value.
Andrew Jeffrey has consistently endorsed the stock and has set a 12-month price target of $55, which is one of the two targets exceeding the current price. (Affirm’s stock went public in January 2021.)
The other optimistic target comes from Mizuho Securities analyst Dan Dolev, who has set a 12-month target of $65.