Affirm Earnings Missed Forecasts. The Stock Is Soaring.

1 week ago 8
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Updated Sept. 9, 2021 6:30 p.m. ET / Original Sept. 9, 2021 4:30 p.m. ET

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Affirm Holdings Inc. website location surface connected a laptop computer

Gabby Jones/Bloomberg

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Affirm Holdings banal is soaring adjacent aft the institution reported earnings that missed expert forecasts for nett income.

Affirm reported a fourth-quarter nonaccomplishment of 48 cents a share, missing forecasts for a 29 cent loss, connected income of $261.8M. Revenue bushed expectations for $226.39M. The buy-now-pay-later institution besides said it expects fiscal first-quarter gross of $240 cardinal to $250 million, supra forecasts for $234 million.

Affirm says it’s gaining traction successful smaller-dollar items, signing up much merchants, and expanding its services. The institution reported 29,000 progressive merchants connected its network, up from 5,700 a twelvemonth earlier.

Sales are accelerating successful categories similar manner and beauty, on with “reopening” categories similar travel, which deed 14% of gross merchandise volume.

The company’s GAAP nonaccomplishment would person been narrower without accounting for stock-based compensation and non-cash items. The institution posted adjusted operating income of $14 cardinal compared to a GAAP nonaccomplishment of $128 million.

Investors seemingly enactment much value connected the gross guidance than the net arsenic Affirm banal jumped 20% successful after-hours trading.

The shares person been connected a teardrop since the institution announced that it had struck a woody with Amazon.com (AMZN) to connection its BNPL work astatine checkout connected Amazon’s site, aiming to rotation it retired implicit the adjacent fewer months. Affirm said its woody with Amazon is “non-exclusive,” however, indicating that different BNPL services whitethorn besides beryllium disposable connected the e-commerce site.

Mizuho Securities’ Dan Dolev called the results “outstanding” successful a note. Gross merchandise volume, excluding income related to Peloton products, was up 178%, marking a “significant acceleration” from the 100% maturation successful the anterior quarter, helium noted.

Dolev reiterated a Buy standing connected the banal and $110 target, though that’s already looking stale. Shares were trading astir $110 after-hours connected Thursday, pursuing a 5.2% summation successful the regular session. The banal was up 40% implicit the past period of trading astatine Thursday’s close, and has gained 53% during the past 3 months.

Corrections & Amplifications:Affirm reported 29,000 progressive merchants connected its network. An earlier mentation of this communicative said it reported 29 million.

Write to Ben Levisohn astatine ben.levisohn@barrons.com 

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