AFRM Stock Dips Over 21%, Affirm Reports Fiscal Q2 2022 Results

During the second quarter of the fiscal year 2022, Affirm reported total revenue of $361.0 million, a 77% increase compared to the same period last year.

Affirm Holdings Inc. (NASDAQ: AFRM) stock closed Thursday, Feb 10, trading at $58.68, after dropping 21.42 percent. The drop was exacerbated during the after-hours with losses of approximately 7.29 percent as of Feb 10, 7:59 p.m EST.  The buy-now-pay-later firm saw its stock market plummet after reporting a huge miss in revenue guidance. Additionally, in Q2 of the fiscal year,  Affirm reported a wider-than-expected loss per share, which missed Wall Street expectations. According to the company’s earnings report, loss per share during the quarter came in at $0.57 while analysts expected loss per share of $0.37.

Affirm Q2 Earnings Results

For Q2 Affirm reported total revenue of $361.0 million, a 77% increase compared to the same period last year.

Investors were keen on the company’s operating loss that came in at $196.2 million compared to $26.8 million in the second quarter of fiscal 2021.

On the brighter perspective, the company’s gross merchandise volume for the second quarter of fiscal 2022 was $4.5 billion, an increase of 115 percent.

Additionally, Affirm noted that its active merchants during the quarter increased from 8,000 to 168,000. The spike is ostensibly driven primarily by the adoption of Shop Pay Installments by merchants on Shopify’s platform.

In a statement through the press, Max Levchin, Founder and CEO of Affirm, noted that the company is critical to both merchants and their customers.

“Affirm’s strong growth accelerated this quarter, reflecting the key advantages of our superior technology, and commitment to putting people first,” said Levchin. “We more than doubled gross merchandise volume year over year. Over the last 12 months, we have added nearly seven million active consumers to our network, while enabling 168,000 merchant partners to better serve their customers.”

AFRM Stock and Market Outlook

Affirm stock has been on a decline for the past year, despite hitting an all-time high of around $170 in November 2021 according to TradingView. According to market data provided by MarketWatch, AFRM stock has dropped approximately 53%, 41%, and 60% in the past year, YTD, and three months respectively through Thursday.

The company has a market cap of $21.33 billion and 208.2 million shares outstanding. Having been rated 14 times, Affirm shares received an average rating of Over. Additionally, the stock received an average recommendation of Overweight and an average target price of $100.64.

The company is, however, also struggling with the heightened inflation, that is apparently at decades ATH. Spending habits are bound to change as the purchasing power declines with time.

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Steve Muchoki

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