Affirm Stock Picks Up an Outperform Rating. Why It ‘Stands Out as a Leader.’

Affirm Holdings boasts an attractive, sustainable valuation, Oppenheimer analysts said as they initiated coverage with an Outperform rating and $80 price target. (abby Jones/Bloomberg)

Affirm Holdings is a “buy now, gain later” story according to Oppenheimer analysts, who initiated coverage on shares of the fintech Monday.

Analysts led by Rayna Kumar rate the stock at Outperform with an $80 price target. In their view, Affirm “stands out as a leader” in the “buy now, pay later,” or BNPL, space, with an attractive valuation that should hold up “in a stable macro environment.”

Underpinning their bullish thesis is Affirm’s differentiated underwriting, “which supports premium growth without compromising on risk discipline,” the analysts wrote. The Oppenheimer team noted that global BNPL volume increased at a 21% compound annual growth rate from 2022 to 2024. Affirm, by comparison, generated a 42% CAGR.

While a sharp economic downturn introduces risk to the firm’s model, consumer spending remains resilient, which is “a key focal point for BNPL investors,” Oppenheimer continued. Moreover, Affirm’s lending skews toward higher-quality borrowers compared with peers, and the company’s ability to underwrite each transaction “should drive flexibility and resilience if macro factors worsen.”

While Evercore ISI reiterated an Outperform rating on Affirm shares in a separate note Monday, the firm doesn’t anticipate outsize gains heading into the second-quarter print. Sector-wide expectations remain high due to sustained customer spending and better-than-expected credit trends, even as stocks in Evercore’s coverage lag the broader indexes this year, the analysts wrote.

Affirm’s long-term growth story remains intact, but even modest softness in the company’s 2026 outlook “could prompt a slight pullback,” Evercore analysts led by Adam Frisch wrote. They believe Cash App owner Block has a more favorable risk-reward balance heading into earnings. The analysts rate Block stock at Outperform with an $85 price target.

Affirm stock rose 2.2% to $70.38 in premarket trading Monday. Of 26 firms polled by FactSet, 17 rate the stock at Buy or the equivalent, while nine rate it at Hold.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com