Loop Capital Initiates Affirm at Buy, Sets $105 Price Target

According to CNBC, Loop Capital initiated coverage of Affirm with a buy rating and a $105 price target, implying about 45% upside from Tuesday's close. Analyst Reginald Smith said the buy-now-pay-later company has strong growth and that its results versus competitors suggest its potential has not yet been fully realized. Smith said Affirm already powers more than $50 billion in annual gross merchandise revenue, connects more than 27 million consumers with more than 500,000 merchants, and processes fewer than seven transactions per consumer each year on average. He added that expanded distribution through partners such as Stripe and Adyen, along with broader acceptance for the Affirm Card, could support sustained 25%+ GMV and revenue growth. Smith also said Affirm's Visa-branded card represents a $2.4 trillion opportunity based on annual purchase volume and noted the card has 4 million users, with room to grow fivefold over time. He said Affirm is about one-third the size of Klarna by GMV but generates 40% more transaction profit dollars and nine times more adjusted operating profit. Affirm shares are down 3% this year but have risen 42% over the past six months, and 28 of 36 analysts covering the stock rate it buy or strong buy, according to LSEG.