Affirm (NASDAQ:AFRM) Stock Falls 7.4% After Analyst Downgrade

Key Points

• Affirm shares fell 7.4% to about $72.13 after Goldman Sachs cut its price target from $115 to $103, while maintaining a Buy rating.
• Despite the downgrade, analyst sentiment remains positive: 24 analysts rate the stock Buy and eight rate it Hold, producing a “Moderate Buy” consensus and an average target of $97.69.
• Affirm recently reported strong quarterly earnings, including $4.62 in EPS versus a $0.35 estimate and 33.1% year-over-year revenue growth, though insiders have sold 214,527 shares worth nearly $17 million over the past 90 days.

Affirm Holdings, Inc. (NASDAQ:AFRM - Get Free Report)'s share price traded down 7.4% during trading on Wednesday after The Goldman Sachs Group lowered their price target on the stock from $115.00 to $103.00. The Goldman Sachs Group currently has a buy rating on the stock. Affirm traded as low as $73.80 and last traded at $72.1260. Approximately 464,415 shares were traded during mid-day trading, a decline of 91% from the average daily volume of 5,172,717 shares. The stock had previously closed at $77.89.

AFRM has been the subject of several other research reports. Bank of America upped their price target on Affirm from $93.00 to $104.00 and gave the stock a "buy" rating in a report on Friday, August 28th. Susquehanna raised their target price on Affirm from $105.00 to $110.00 and gave the stock a "positive" rating in a research report on Friday, August 28th. Oppenheimer lifted their target price on shares of Affirm from $100.00 to $104.00 and gave the stock an "outperform" rating in a research note on Friday, August 28th. Robert W. Baird boosted their price objective on Affirm from $70.00 to $82.00 and gave the company a "neutral" rating in a research note on Tuesday, July 14th. Finally, BMO Capital Markets reaffirmed an "outperform" rating on shares of Affirm in a report on Wednesday, September 9th. Twenty-four research analysts have rated the stock with a Buy rating and eight have issued a Hold rating to the company. According to data from MarketBeat, the company has an average rating of "Moderate Buy" and a consensus target price of $97.69.

Insider Activity at Affirm

In other Affirm news, COO Michael Linford sold 79,219 shares of Affirm stock in a transaction that occurred on Friday, August 28th. The stock was sold at an average price of $90.01, for a total value of $7,130,502.19. Following the transaction, the chief operating officer directly owned 120,713 shares of the company's stock, valued at $10,865,377.13. The trade was a 39.62% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Katherine Adkins sold 41,664 shares of the company's stock in a transaction on Thursday, September 3rd. The shares were sold at an average price of $75.53, for a total transaction of $3,146,881.92. Following the sale, the insider owned 152,439 shares of the company's stock, valued at $11,513,717.67. This represents a 21.46% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 214,527 shares of company stock valued at $16,974,716. Insiders own 11.01% of the company's stock.

Institutional Investors Weigh In On Affirm

Several institutional investors and hedge funds have recently modified their holdings of AFRM. GK Wealth Management LLC purchased a new stake in Affirm in the third quarter worth about $88,000. Rhodes Investment Advisors Inc. ADV increased its holdings in shares of Affirm by 1.3% during the third quarter. Rhodes Investment Advisors Inc. ADV now owns 11,378 shares of the company's stock valued at $788,000 after acquiring an additional 149 shares in the last quarter. Congress Asset Management Co. increased its stake in Affirm by 3.0% during the 3rd quarter. Congress Asset Management Co. now owns 439,115 shares of the company's stock valued at $30,400,000 after purchasing an additional 12,645 shares in the last quarter. QRG Capital Management Inc. raised its holdings in Affirm by 11.8% in the 2nd quarter. QRG Capital Management Inc. now owns 10,829 shares of the company's stock worth $883,000 after acquiring an additional 1,145 shares during the last quarter. Finally, Envestnet Portfolio Solutions Inc. purchased a new position in shares of Affirm in the second quarter worth $307,000. 69.29% of the stock is owned by hedge funds and other institutional investors.

Affirm Stock Down 7.3%

The firm has a market cap of $24.36 billion, a P/E ratio of 13.05, a PEG ratio of 3.16 and a beta of 3.82. The company's 50 day simple moving average is $73.85 and its 200-day simple moving average is $69.90. The company has a current ratio of 11.80, a quick ratio of 11.80 and a debt-to-equity ratio of 1.82.

Affirm (NASDAQ:AFRM - Get Free Report) last issued its earnings results on Thursday, August 27th. The company reported $4.62 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.35 by $4.27. The company had revenue of $1.07 billion for the quarter, compared to analysts' expectations of $1.11 billion. Affirm had a net margin of 45.29% and a return on equity of 47.91%. The firm's quarterly revenue was up 33.1% on a year-over-year basis. During the same quarter last year, the company posted $0.20 earnings per share. Research analysts forecast that Affirm Holdings, Inc. will post 1.91 earnings per share for the current fiscal year.

About Affirm

Affirm Holdings, Inc NASDAQ: AFRM operates a digital commerce and financial services platform that enables consumers to pay for purchases over time. Its point-of-sale financing products allow eligible customers to use installment loans, including both short-term and longer-duration payment options, with terms and costs disclosed before purchase.

Affirm's services are offered through its merchant partners' online and in-store checkout experiences, as well as through the Affirm app and website.

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