Affirm falls 13% as the outlook falls short of expectations, but the results are still seen as strong.’
Send Karaahmetovic wrote this.
Affirm Holdings (NASDAQ: AFRM) shares fell more than 13% in premarket trade Friday after the payments company issued a bleak full-year forecast.
Affirm reported an in-line loss per share of $0.65 on sales of $364.1 million, above the analyst average of $354.66 million for its fiscal fourth quarter.
Affirm expects revenue of $355 million (at the midpoint of the forecast) for the current quarter, a significant decrease from the $386.4 million expected. Revenue is expected to be between $1.63 billion and $1.73 billion for the whole year, which is much lower than the $1.91 billion estimate.
“In light of the uncertain macroeconomic environment, we are entering the upcoming fiscal year with caution while keeping our emphasis on delivering responsible growth and investing to expand our leading position.” The company stated that “on an adjusted operating income basis, we continue to expect to achieve a sustainable profitability run rate by the end of fiscal 2023,” the company stated.
On the basis of “solid” performance, a Goldman Sachs analyst raised the price objective to $25 from $22.
In a client note, the analyst stated, “AFRM had a good quarter, exhibiting financing durability and credit performance while committing to new product innovation and EBIT profitability by the end of F2023.”
According to a Mizuho analyst, the findings were “robust, with hidden green shoots in guidance.” He claims that AFRM “crushed” FQ4 forecasts.
Although AFRM guided higher than the buy-side bogey (3.7% vs. 3.5%), the negative after-hours reaction (-14%) is due to weaker-than-expected GMV guidance and rising charge-offs. We feel GMV’s guidance may just be cautious, and we anticipate the stock’s slide to abate…and maybe reverse direction tomorrow. “Reiterate Buy,” stated the Mizuho analyst in a note.
