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Why Affirm Stock Soared 34% Today | The Motley Fool

What happened

Shares of Affirm Holdings (NASDAQ:AFRM) rocketed 34.4% on Friday after the payment network’s fiscal 2021 fourth-quarter growth metrics dazzled investors. 

So what

Affirm’s revenue surged 71% year over year to $261.8 million. The gains were fueled by a 106% rise in gross merchandise volume (GMV) — the total dollar amount of all transactions conducted on Affirm’s platform, net of refunds — to $2.5 billion.

Affirm’s flexible payment options are proving popular with shoppers. Image source: Getty Images.

Both businesses and consumers are flocking to Affirm’s network. Active merchants soared 412% to nearly 29,000, driven in part by Affirm’s partnership with e-commerce leader Shopify.

Meanwhile, active consumers jumped 97% to 7.1 million. People are also using Affirm’s services more often, with transactions per active consumer rising 8%, to roughly 2.3.

Now what

Investors were no doubt pleased by Affirm’s upbeat forecast for the year ahead. Management expects Affirm’s revenue to grow by roughly 35% to $1.2 billion in fiscal 2022, driven by a 52% increase in GMV, to $12.6 billion.

Better still, these figures are likely to prove conservative, as they don’t include any benefit from Affirm’s partnership with online retail-titan Amazon.com. The two companies plan to bring Affirm’s “buy now, pay later” services to Amazon’s customers in the coming months.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.


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