Bank of America Raises Affirm Price Target After Earnings Beat

Bank of America raised its price target for Affirm following the company's most recent fiscal quarter, in which Affirm reported results that exceeded consensus estimates for revenue and adjusted profit metrics.

In a note to clients, Bank of America analysts wrote that the quarterly report showed stronger operational trends than the market had priced in. The bank pointed to higher-than-expected top-line performance and signs of margin improvement tied to transaction growth and cost controls.

The analysts highlighted healthier borrower payment behavior and steady merchant adoption as factors supporting the outlook. They said the company’s revenue mix is shifting toward more recurring, higher-margin products and cited expanding partnerships with retailers and card issuers as drivers of volume.

Bank of America updated its valuation assumptions, revising its earnings-per-share trajectory and discounted cash flow inputs to reflect faster revenue growth and narrower loss expectations. Those changes produced a higher price target for the stock.

Affirm’s report also noted progress in reducing credit losses relative to originations, which the bank said contributed to improved profitability in the quarter. The company described continued investment in product features and risk-management systems, increased usage among existing merchant partners, and new integrations that expand its point-of-sale reach.

The bank framed the price-target change as a response to the operational data rather than a reversal of earlier concerns. Analysts flagged continuing competitive intensity in the buy-now-pay-later sector and potential regulatory developments as risks that could affect valuation over the longer term.

Affirm, which went public in 2021, offers installment-based financing for online and in-store purchases and competes with other BNPL providers and traditional credit products. Market watchers monitor metrics such as gross merchandise volume, active users, take rates and credit performance to assess the company’s health.

Bank of America’s revision adds to a series of analyst updates across the fintech sector following recent earnings. Investors will focus on Affirm’s next quarterly report and any new data on credit trends and merchant expansion to see whether the recent improvements continue.