Affirm shares surge after quarterly results beat estimates

By Chibuike Oguh

NEW YORK (Reuters) - Shares of Affirm Holdings surged by nearly 25% on Thursday as strong demand for the buy-now-pay-later (BNPL) lender's services and higher interest rates underpinned quarterly results that beat analysts' estimates.

Affirm's gross merchandise value (GMV) rose 28% to $5.6 billion, which allowed net revenue to jump 37% to $496.5 million for the quarter ended Sept 30. The company's net loss narrowed to $171.8 million, down nearly 32% from a loss of $251.3 million a year earlier.

Analysts had expected gross merchandise value of $5.4 billion, net revenue of $448.5 million, and a net loss of $219.6 million, according to LSEG data.

Affirm's stock rose as high as $27.16 on Thursday, its highest level since September last year, after it reported its results. The shares have now gained about 164% year-to-date and were last up 17.4% at $25.54.

The company has continued to gain market share, with customers returning to pre-pandemic shopping patterns that led its travel and ticketing categories to outperform, Chief Executive Max Levchin said in a shareholder letter.

Affirm said it expects GMV to reach between $6.7 billion and $6.9 billion in the current quarter, and net revenue to come in between $495 million and $520 million.

Multiple analysts, including Wedbush, Bank of America Global Research, and UBS, raised their price target for Affirm's stock after the results were reported. The median price target of the 18 analysts covering the stock is $18, up from $16.25 a month ago, and their current recommendation is "hold", according to LSEG data.

Jefferies analysts, however, have an "underperform" rating on Affirm. "The stock will likely rise due to the beat and guide, but we remain on the sidelines due to macro and industry risks," Jefferies analysts led by John Hecht wrote in an investor note.

Earlier this month, announced it would begin offering Affirm's services at checkout to eligible Amazon Business customers, a move that could boost demand for the BNPL lender. Affirm is already available to Amazon retail customers.

(Reporting by Chibuike Oguh in New York; Editing by Bill Berkrot)