After the new integration of Affirm Holdings, Inc. (NASDAQ: AFRM)’s pay-over-time technology in Amazon (NASDAQ: AMZN) Pay, AFRM stock jumped more than 21% considering the potential revenue boost AFRM may receive from this deal. Meanwhile, the improving macroeconomic situation in the U.S. can help AFRM as Americans’ purchasing power increases again. With the stock already up nearly 80% YTD, AFRM stock appears to have a substantial upside in the long term.
AFRM Fundamentals
Amazon Pay Integration
Amazon Pay incorporating AFRM into its service is a significant step forward for AFRM since it will expose AFRM to a new set of customers and can see AFRM achieving a better conversion rate.
The new agreement will allow AFRM to capitalize on one of its strengths as AFRM has almost no user acquisition costs. It is up to merchants to promote its product in the hopes of converting shoppers into buyers and with more traders having access to AFRM more customers will be aware of it.
Improving Macroeconomics
With expectations that the Federal Reserve will pause interest rate hikes, the macroeconomic prospects in the US are looking to improve. While macroeconomic improvements will benefit the whole market, AFRM and other “Buy Now, Pay Later” (BNPL) services are set to benefit the most since customers’ purchasing power will increase.
AFRM is also partnering with Fair Isaac Corporation (NYSE: FICO) to build a first-of-its-kind credit scoring model that would enable buy now, pay later loans to be consistently and transparently factored into credit and lending decisions.
Institutional Ownership
It is also worth noting that AFRM stock has high institutional ownership of more than 80%, which indicates that AFRM is on the right path. Given these institutions’ confidence in the company’s prospects and with the improving macro environment, AFRM stock could be poised to continue running this year.
Short Data
Furthermore, there is also a chance of a short squeeze happening as AFRM stock has a short interest rate of 23% and 32% of its float on loan. This can result in the AFRM stock price soaring as the short sellers might be forced to cover their short positions especially since AFRM stock is almost 80% up YTD.
AFRM Financials
In its Q3 2023 report, AFRM’s assets increased 8% QoQ from $6.9 billion to $7.5 billion, and its cash and cash equivalents increased 30% QoQ from $972 million to $1,255 million. AFRM’s total liabilities increased by 16% QoQ from $4.3 billion to $5 billion.
Revenue also increased 7% YoY from $354 million to $380 million. Operating costs increased almost 18% from $581 million to $691 million, which contributed to the operating loss increase of 37% YoY from $226 million to $310 million, which amounted to a net loss of $205 million – a 279% increase YoY.
Technical Analysis
AFRM stock’s trend is bullish with the stock trading in an upwards channel within a sideways channel between $9.16 and $15.24. Looking at the indicators, the stock is trading above the 200, 50, and 21 MAs which are bullish indications. Meanwhile, RSI is neutral at 50 and the MACD is approaching a bearish crossover.
As for the fundamentals, AFRM just witnessed a catalyst in the new Amazon Pay integration which could boost AFRM’s revenues significantly. With the macro environment improving in the US, AFRM stock could further run especially as more consumers regain their purchasing power.
AFRM Forecast
With the macroeconomic situation improving in the US, AFRM and other BNPL services are looking to thrive as their customers’ purchasing power increases. Furthermore, AFRM has high institutional ownership which may indicate that AFRM stock is currently in a good position. AFRM stock is certainly a stock to keep an eye on, especially since its high short interest rate makes it a strong short squeeze candidate.
AFRM Fundamentals
Amazon Pay Integration
Amazon Pay incorporating AFRM into its service is a significant step forward for AFRM since it will expose AFRM to a new set of customers and can see AFRM achieving a better conversion rate.
The new agreement will allow AFRM to capitalize on one of its strengths as AFRM has almost no user acquisition costs. It is up to merchants to promote its product in the hopes of converting shoppers into buyers and with more traders having access to AFRM more customers will be aware of it.
Improving Macroeconomics
With expectations that the Federal Reserve will pause interest rate hikes, the macroeconomic prospects in the US are looking to improve. While macroeconomic improvements will benefit the whole market, AFRM and other “Buy Now, Pay Later” (BNPL) services are set to benefit the most since customers’ purchasing power will increase.
AFRM is also partnering with Fair Isaac Corporation (NYSE: FICO) to build a first-of-its-kind credit scoring model that would enable buy now, pay later loans to be consistently and transparently factored into credit and lending decisions.
Institutional Ownership
It is also worth noting that AFRM stock has high institutional ownership of more than 80%, which indicates that AFRM is on the right path. Given these institutions’ confidence in the company’s prospects and with the improving macro environment, AFRM stock could be poised to continue running this year.
Short Data
Furthermore, there is also a chance of a short squeeze happening as AFRM stock has a short interest rate of 23% and 32% of its float on loan. This can result in the AFRM stock price soaring as the short sellers might be forced to cover their short positions especially since AFRM stock is almost 80% up YTD.
AFRM Financials
In its Q3 2023 report, AFRM’s assets increased 8% QoQ from $6.9 billion to $7.5 billion, and its cash and cash equivalents increased 30% QoQ from $972 million to $1,255 million. AFRM’s total liabilities increased by 16% QoQ from $4.3 billion to $5 billion.
Revenue also increased 7% YoY from $354 million to $380 million. Operating costs increased almost 18% from $581 million to $691 million, which contributed to the operating loss increase of 37% YoY from $226 million to $310 million, which amounted to a net loss of $205 million – a 279% increase YoY.
Technical Analysis
AFRM stock’s trend is bullish with the stock trading in an upwards channel within a sideways channel between $9.16 and $15.24. Looking at the indicators, the stock is trading above the 200, 50, and 21 MAs which are bullish indications. Meanwhile, RSI is neutral at 50 and the MACD is approaching a bearish crossover.
As for the fundamentals, AFRM just witnessed a catalyst in the new Amazon Pay integration which could boost AFRM’s revenues significantly. With the macro environment improving in the US, AFRM stock could further run especially as more consumers regain their purchasing power.
AFRM Forecast
With the macroeconomic situation improving in the US, AFRM and other BNPL services are looking to thrive as their customers’ purchasing power increases. Furthermore, AFRM has high institutional ownership which may indicate that AFRM stock is currently in a good position. AFRM stock is certainly a stock to keep an eye on, especially since its high short interest rate makes it a strong short squeeze candidate.