AFRM · Affirm Holdings
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $75.92
Note written ·
Price against the kill line
14.2% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $75.92, on record since 11 November 2026. The shares are down 12.6% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $75.92, the 15 October 2026 close and the highest of the 20 sessions before 11 November 2026, which would put the shares back above the 50-day average and show them leading the S&P 500; fiscal second-quarter revenue above the $1.465 billion top of the guide with delinquency at or below 2.9% would also prove the call wrong.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Financials
Quarter to 30 September 2026, filed 5 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,262
- Revenue, change on a year (%)
- +35.2
- Operating margin (%)
- 14.8
- Free cash flow, four quarters ($M)
- 817
- Net cash, cash less debt ($M)
- −8,184
- Price to earnings (×)
- 11.4
- Enterprise value to sales (×)
- 6.8
- Enterprise value to operating income (×)
- 57.5
All filed numbers
What Affirm Holdings reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 1,262 | +35.2 | 14.8 |
| first filed | 1,166 | +33.0 | 12.6 |
| first filed | 1,039 | +32.6 | 8.5 |
| first filed | 1,123 | +29.6 | 10.5 |
| first filed | 933 | +33.6 | 6.8 |
| first filed | 876 | +33.0 | 6.6 |
| Pre-tax income ($M) | 205 |
| Net income ($M) four quarters: 2,013 | 164 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +1.0 |
| Operating cash flow ($M) | 1,064 |
| Capital spending ($M) | 247 |
| Free cash flow ($M) | 817 |
| Cash and short-term investments ($M) | 2,072 |
| Debt ($M) long-term debt | 10,256 |
| Net cash, cash less debt ($M) | −8,184 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | Not reported |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 5,751 |
| Market value ($M) | 22,905 |
| Enterprise value, market value plus net debt ($M) | 31,089 |
| Enterprise value to sales (×) | 6.8 |
| Enterprise value to operating income (×) | 57.5 |
| Price to earnings (×) | 11.4 |
| Price to book value (×) | 4.0 |
| Free-cash-flow yield (%) | 3.6 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 4.9% of shares outstanding sold short, 4.1 days of average trading to cover, −3.0% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $23.9M |
| 12 monthsfrom | $0 | $89.6M |
The thesis
Affirm Holdings' shares are more likely to lag the S&P 500 over the next three months. Investors are pricing rising late payments and funding costs ahead of a growth rate that keeps beating. The holiday quarter settles it: the fiscal second-quarter report, expected in early February 2027, shows whether delinquency steadies while volume growth holds in the high 30s percent.
The 5 November 2026 report was strong on growth. Revenue was $1.26 billion, up 35% year over year, and gross merchandise volume (GMV, the dollar value of purchases financed on the platform) was $14.4 billion, up 34%. Affirm guided fiscal second-quarter revenue to $1.435 billion–$1.465 billion against a $1.431 billion estimate, according to a 5 November 2026 Benzinga headline.
Credit moved the other way. Affirm's 30-day delinquency on monthly installment loans, excluding Peloton and Pay-in-X loans, rose to 2.9%, up 9 basis points from a year earlier and 35 basis points from the June quarter (company headline, 5 November 2026). On the earnings call, management tied higher provisions to September underwriting experiments that kept more loans on the balance sheet, according to a Zacks call summary dated 6 November 2026.
The price shows the doubt. The shares closed at $65.84 on 12 November 2026, 27.2% below the $90.44 intraday high of 28 August 2026, after a quarter that beat on revenue and earnings per share. The rating is Low because the shares fell after a beat and a raised outlook, now close below both their 50-day and 200-day averages, and the next hard test of credit arrives only with the February report.
Bullish and bearish views on Affirm Holdings, Inc.
The bull case on Affirm Holdings, Inc. (AFRM), in brief: growth beat and the outlook rose. The bear case: delinquency rose 35 basis points in a quarter.
Bull case
- Growth beat and the outlook rose. Quartr's summary of the 5 November 2026 report shows fiscal 2027 GMV guided above $65.25 billion, up from above $64 billion in August. The chief financial officer called 30% growth the minimum for fiscal 2027 and put early second-quarter growth in the high 30s percent (Zacks, 6 November 2026).
- Card volume keeps building. Affirm Card GMV was $3.3 billion with 6.0 million active cardholders in the September quarter (Quartr). On 11 November 2026 Affirm announced card-specific financing offers and a pilot of Affirm Edge, which places its installment loans with other banks' debit cards and apps; the Zacks call summary puts the first Edge pilots in the first half of calendar 2027.
- Underwriting model gains. Management said on the 5 November 2026 call that its new AI underwriting model could lift approval rates by about 2 to 3 percentage points without added credit losses (Zacks, 6 November 2026).
- A new merchant and a new market. Affirm announced an exclusive multi-year buy now, pay later deal with Sam's Club on 22 October 2026 and an agreement to acquire Germany's Ratepay from Nexi on 9 November 2026. Neither announcement disclosed financial terms.
- Several post-report targets sit well above the price. On 6 November 2026 BofA raised its target to $109 from $104, Piper Sandler set $105, Barclays $100 and Scotiabank raised to $97 (Benzinga analyst-action headlines).
Bear case
- Delinquency rose 35 basis points in a quarter. The 2.9% rate on the measured loan group is the highest step-up the company flagged in the 5 November 2026 report, and it came with higher provisions.
- Funding costs climbed. Quartr's summary of the report says funding costs rose 27 basis points from the prior quarter as benchmark rates climbed. Affirm finances loans in capital markets, so higher yields raise its costs directly.
- Targets were cut after the beat. RBC cut its target to $83 from $96 and Stephens to $80 on 6 November 2026, and Cantor Fitzgerald kept Overweight but cut to $84 on 9 November 2026 (Benzinga). Barclays and Piper Sandler also lowered targets on 6 November 2026.
- Executives sold at higher prices. SEC Form 4 filings show the chief financial officer sold 65,591 shares at $80.02 on 9 October 2026 after an option exercise, and the chief legal officer sold 83,328 shares at an average $73.04 over 1 September to 3 September 2026, both under Rule 10b5-1 plans. The chief accounting officer sold 25,000 shares at $72.41 on 4 September 2026 and 26,980 at $72.19 on 14 September 2026.
- Rate news hits the shares. Benzinga reported the Nasdaq 100 fell 1% on 14 October 2026 after hot September inflation data lifted rate-hike bets, and a 24/7 Wall St. headline tied a 10% drop in Affirm to the same session.
- Partner concentration risk is on record. Affirm lost Walmart to Klarna in March 2025. Sam's Club is owned by Walmart, and its in-store availability starts only in 2027.
Price setup
The shares closed at $65.84 on 12 November 2026. On adjusted daily closes as of that date, the price sits just under the 200-day moving average of $66.47 and 8.5% under the 50-day moving average of $71.97. The 3-month change is −16.0%, against a $78.35 close on 14 August 2026.
The report did not stop the slide. The shares closed at $69.66 on 5 November 2026, the day of the report, then $68.11 on 6 November 2026, and have closed between $65.84 and $68.11 in every session since. A sustained return above the 50-day average would be the first price sign that buyers are looking past the credit data.
The 52-week range runs from a closing low of $42.53 on 27 March 2026 to an intraday high of $90.44 on 28 August 2026. Post-report analyst targets run from Stephens' $80 to BofA's $109, all above the 12 November 2026 close.
Catalysts ahead
- ~15 November 2026 (est.): Affirm launch on SamsClub.com ahead of the holiday season. First step in the Sam's Club deal; early volume commentary tests how much the partnership adds to fiscal 2027 GMV.
- 27 November 2026: Black Friday opens the holiday shopping weekend, through Cyber Monday on 30 November 2026. The October-to-December quarter carries Affirm's heaviest volume, so holiday usage reads test management's high-30s early growth rate.
- ~9 December 2026 (est.): Federal Reserve December rate decision. Affirm's funding costs, which rose 27 basis points last quarter, and consumer-lender valuations follow rate expectations.
- ~5 February 2027 (est.): Fiscal second-quarter 2027 report (October-December). Shows whether delinquency holds at or below 2.9% and whether revenue lands inside the $1.435 billion-$1.465 billion guide.
What would change the view
A daily close above $75.92, the 15 October 2026 close and the highest of the 20 sessions before 11 November 2026, which would put the shares back above the 50-day average and show them leading the S&P 500; fiscal second-quarter revenue above the $1.465 billion top of the guide with delinquency at or below 2.9% would also prove the call wrong.
What it trades with
Affirm trades with rate expectations and with other consumer lenders: the 14 October 2026 inflation print moved both the Nasdaq 100 and the shares lower the same session, and the Federal Reserve's December decision is the next rate event. Holiday retail data from the Black Friday weekend feed directly into its fiscal second-quarter volume. Klarna is the direct competitor for large merchants, as the 2025 Walmart loss shows.
The evidence, claim by claim (8)
- First-quarter fiscal 2027 revenue was $1.26 billion (up 35% year over year) and GMV was $14.4 billion (up 34%). Affirm Q1 FY27 results; 24/7 Wall St. and Panabee summaries · as of
- Affirm guided second-quarter fiscal 2027 revenue to $1.435 billion-$1.465 billion versus a $1.431 billion estimate. Benzinga headline on Affirm Q1 FY27 results · as of
- 30+ day delinquencies on monthly installment loans excluding Peloton and Pay-in-X rose 9 bp year over year and 35 bp quarter over quarter to 2.9%. Affirm 5 November 2026 company headline · as of
- Fiscal 2027 GMV is guided above $65.25 billion; funding costs rose 27 bp quarter over quarter; Affirm Card GMV was $3.3 billion with 6.0 million active cardholders. Quartr Q1 2027 earnings summary · as of
- Management set 30% as the minimum fiscal 2027 growth rate, cited high-30s growth early in fiscal Q2, and targeted first Affirm Edge pilots for the first half of calendar 2027. Zacks Q1 FY27 earnings call summary (Yahoo Finance) · as of
- RBC cut its Affirm target to $83 from $96 and Stephens to $80; BofA raised to $109 from $104; Scotiabank raised to $97; Piper Sandler set $105 and Barclays $100. Benzinga analyst-action headlines · as of
- Cantor Fitzgerald maintained Overweight and lowered its Affirm target to $84. Benzinga analyst-action headline · as of
- Chief Financial Officer Robert O'Hare sold 65,591 shares at $80.02 on 9 October 2026 after an option exercise, under a Rule 10b5-1 plan. SEC Form 4 filed 14 October 2026 · as of
Sources
- Affirm Q1 Earnings Call Highlights 30% Growth Goal and Credit Risks · finance.yahoo.com ·
- Affirm (AFRM) Q1 2027 earnings summary · quartr.com
- Affirm Q1 2027: Revenue Beats, EPS Misses Expectations · 247wallst.com
- Affirm Fiscal Q1 2027 Revenue Grows 35% to $1.26 Billion · panabee.com
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