Giving the market some affirmationAfter seeing a sea of red for days now, buy-now-pay-later (BNPL) company Affirm gives investors a glimmer (or rather a wave) of green after wowing investors with earnings.
- Affirm shares popped by 65% in 24 hours, rallying 23% on Thursday and another 29% in extended trading – that hasn't quite made up for its 52% loss in the five sessions before that, but getting there. It came after Affirm beat on both ends with LPS of $0.19 on revenues that grew 23% to hit $355m, prolly helped by lower transaction costs.
- Higher payments helped it power through. Yep, the market may be in disarray, but that seems to be even more reason to use BNPL services – active consumers jumped by 137% and merchandise volume grew by 73%. It’s especially reaffirming to investors after fintech rival Upstart saw shares plummet after an earnings fail earlier this week.
- Deals on deals on deals. Affirm will be entering a strategic partnership with payment firm Stripe to adapt payments on the platform; it’s officially extended its multi-year deal with Shopify, which props up sales nicely; and it’s even made a deal with fintech brand Fiserv as part of its expansion. Ambition is the key to success, they say.
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Affirm’s Twitter tongue slipBuy now, pay later provider Affirm makes a rookie move on Twitter that casts a dark shadow over its latest earnings.
- Shares suffered a 21% drop on Thursday after a majorly botched earnings release took investors on a rollercoaster ride. Someone must have left an intern in charge or something, because somebody accidentally released partial financials on the Affirm Twitter account a few hours early. Wouldn’t wanna be that guy today…
- It showed that revenue jumped 77% to $361m, which topped estimates of 61% and sent the stock briefly up 6%. The jump in sales was largely thanks to its recent Amazon (AMZN) deal and its Peloton (PTON) partnership. The “human error” was quickly cleared up though and full financial results were released – which showed a less pleasing side to Q2.
- Affirm posted LPS of $0.57, wider than expectations and larger than LPS of $0.38 a year ago. The losses have come on the back of rising costs associated with marketing and wages – two things it needs to fuel growth in the budding sector.
Affirm-ative action from analystsEveryone loves a bit of affirmation, and buy-now-pay-later company Affirm gets an analyst stamp of approval that gives prices the confidence they need.
- The stock marched upward 17% on Friday, breaking a four-week losing streak to end the week in the green.
- An upgrade from DA Davidson was partly to thank. Analysts upgraded the stock to a Buy, saying that data suggests BNPL usage more than doubled during the holidays – which, combined with its Amazon partnership, paints a pretty picture for the future.
- Affirm is looking to beef up its crypto offerings, and is working on a way to let people buy and sell crypto on its app. It also just released a Chrome extension that lets consumers use its BNPL services on platforms that have yet to integrate the app.
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Investigate Now, Pay LaterInvestors are in need of some Affirm-ation after U.S. consumer watchdogs come sniffing around buy now, pay later (BNPL) firms.
- A bunch of BNPL firms are under investigation by The Consumer Financial Protection Bureau (CFPB), which is worried that people are accumulating too much debt.
- BNPL stocks have boomed recently thanks to an uptick in online shopping during Covid, giving the likes of Afterpay (AFTPY) and Klarna triple digit increases in sales growth.
- Shares in Affirm plummeted nearly 11% on Thursday along with other BNPL stocks under investigation. Afterpay (AFTPY) lost over 4%, Block (SQ) (formerly Square) closed down nearly 5%, and PayPal (PYPL) sank 1%.
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A new deal could lead to cool highsA shiny new deal with Amazon gives investors the Affirm-ation they were looking for from fiscal Q1 earnings.
- Revenue was up 55% to $269.4m, coming in well ahead of both its own range and expectations.
- Shares were up 30% after-hours to more than make up for the 15% the stock slipped on Wednesday in anticipation.
- Active consumers are up 124% as the business continues to grow its partnerships.
- A new exclusivity deal with Amazon (AMZN) is what got people really excited – Affirm will now be the only “buy now, pay later” provider for the e-commerce giant.
- Q2 revenue guidance of $330m beat expectations, fuelled by the ongoing boom in the new payment trend. It’s estimated consumers will spend $100 billion using BNPL programs in 2021.