Affirm Beats Estimates, Needham Raises Price Target to $100

Affirm Holdings Inc shares remain in focus after the company reported stronger-than-expected fourth-quarter results and issued fiscal 2027 guidance above market consensus, prompting Needham to raise its price target.

Needham Highlights Strong Growth and Credit Performance

Needham analyst Kyle Peterson maintained a Buy rating on Affirm and raised his price target from $90 to $100, citing strong execution across growth, profitability, credit, and funding.

Fourth-quarter gross merchandise volume reached $14.1 billion, up 35.6% year-over-year, exceeding Needham's prior estimate of $13.4 billion.

Revenue grew 33% to $1.17 billion, surpassing Needham's estimate of $1.11 billion and market consensus of $1.16 billion. Revenue less transaction costs reached $589.3 million, above Needham's estimate of $542.5 million and market consensus of $550.3 million.

GAAP earnings per share came in at $4.62, well above Needham's estimate of $0.28 and market consensus of $0.35, driven by stronger core business trends and a one-time tax benefit from the reversal of deferred tax assets.

Peterson also highlighted strong credit performance, which he attributed to a resilient consumer base and Affirm's transaction-based underwriting model.

Fiscal 2027 Guidance Above Market Consensus

For the first quarter, Affirm expects gross merchandise volume between $13.7 billion and $14.0 billion, with revenue between $1.19 billion and $1.22 billion, versus market consensus of $1.16 billion.

For fiscal 2027, Affirm expects gross merchandise volume to exceed $64 billion. Peterson projects revenue of approximately $5.43 billion, above market consensus of $5.29 billion.

Affirm also expects adjusted operating margin to exceed 30.5% and GAAP operating margin to exceed 14.5%.

Peterson remains optimistic about Affirm's physical store expansion and international market opportunities. He also highlighted the expanded partnership with Shopify Inc and the launch of Shop Pay Installments in Australia as another potential growth driver.

AFRM stock performance: Affirm Holdings shares rose 4.53% on Friday to close at $81.00.