Affirm Could Increase 18% As Consumers Plan To Step Up Use Of Buy Now And Pay Later Services, Bank Of America Says

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Affirm CEO Max Levchin.
  • Bank of America raised its price target for Affirm to $ 160 from $ 119 on Tuesday.
  • He said Affirm saw growth in both app downloads and monthly active users in September, overtaking its peers AfterPay, Klarna and QuadPay / Zip.
  • Affirm recently signed agreements with Target and Amazon.com for its buy now, pay later service.

Affirm’s installment payment business has developed at a time of deceleration for its peers, Bank of America said on Tuesday, raising its price target on the shares of the fintech company.

Bank of America raised its price target on Affirm to $ 160 from $ 119. The rise implies that the stock could rise 18% from Monday’s closing price of $ 135.03.

“We believe a higher multiple is warranted given AFRM’s current business momentum,” he said, noting that he tracks app downloads and monthly active users in the United States at using data from SensorTower, an application analytics company.

Affirm shares rose 4.1% on Tuesday, then reduced the gain to 3%. The stock has climbed about 42% since its stock market debut in January.

The investment bank said Affirm was the only buy-now and after-payment provider to track September’s growth for app downloads and monthly active users compared to August and the first half of 2021. She said the acceleration was due in part by Shopify extending Affirm’s installment payment service to all of its U.S. merchants in June. Affirm and Shopify first announced their partnership last year.

In a bank survey, users of buy now, pay later services said they plan to use them more often over the next 12 months. According to the survey, 54% of users said they plan to buy now, pay later eight or more times in the next year, up from 47% in the bank’s latest industry survey.

Last week, Target said its online shoppers can use Affirm to pay for purchases over $ 100. Amazon said in late September that it was teaming up with Affirm to offer settled payments to its customers. Both announcements propelled Affirm shares higher.

Affirm’s broad product roadmap unveiled late last month should see the company a long-term winner in the burgeoning immediate buyout and late payment industry, BofA said. He also predicts that Affirm will become a broader provider of fintech services such as banking, crypto assets, shopping and rewards as the company continues its “SuperApp” strategy.

Growth in Affirm app downloads accelerated in September, to 121% from 111% in August. AfterPay downloads rose 68% from 118% in August. “Surprisingly, Klarna saw its growth turn negative (to -7%) for the first time,” BofA said, saying app downloads rose 54% in August.

Private company QuadPay / Zip posted stable year-over-year growth compared to a 63% increase in August, the bank said.


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