Affirm Falls 13% as Outlook Trails Expectations, Results Still Seen as 'Strong'

© Reuters. Affirm (AFRM) Falls 13% as Outlook Trails Expectations, Results Still Seen as 'Strong'

By Senad Karaahmetovic

Shares of Affirm Holdings (NASDAQ:AFRM) are down over 13% in premarket trading Friday after the payments company gave a lackluster full-year forecast.

For its fiscal Q4, Affirm reported an in line loss per share of $0.65 on revenue of $364.1 million, which beat the analyst consensus of $354.66 million.

For this quarter, Affirm is looking for revenue of $355 million (at the midpoint of the guidance), which marks a big miss compared to the $386.4 million expectations. On a full-year basis, revenue is seen between $1.63 billion and $1.73 billion, again significantly lower than the $1.91 billion consensus.

“In light of the uncertain macroeconomic backdrop, we are approaching our next fiscal year prudently while maintaining our focus on driving responsible growth and continuing to invest in strengthening our leadership position. We continue to expect to achieve a sustained profitability run rate, on an adjusted operating income basis, by the end of fiscal 2023,” the company said.

A Goldman Sachs analyst hiked the price target to $25 from $22 on “strong” results.

“AFRM delivered a strong quarter demonstrating funding durability and credit performance while committing to new product innovation and EBIT profitability by the end of F2023,” the analyst said in a client note.

A Mizuho analyst said the results were “strong with hidden green shoots in guide.” He argues AFRM “crushed” FQ4 expectations.

“Although AFRM guided above the buy-side bogey (3.7% vs. 3.5%) the negative knee-jerk reaction (-14% after hours) is due to weaker than expected GMV guide, and rising charge-offs. We believe GMV guide may simply prove conservative, and expect the decline in the stock to abate...and potentially even reverse course tomorrow. Reiterate Buy,” the Mizuho analyst wrote in a note.