Affirm Holdings (NASDAQ: AFRM) has experienced a meteoric rise in its stock price, soaring by 12% on Monday. This surge catapulted the shares to their highest point since August 2022, marking a 203% increase from the lowest point this year.
Investors cheer as Affirm and other Buy Now Pay Later (BNPL) companies delivered a stellar performance over the Thanksgiving weekend. The most recent data indicates a notable uptick in American shopping activity during Black Friday and Cyber Monday.
The Thanksgiving shopping extravaganza shattered records, with Black Friday sales reaching an unprecedented $8.9 billion, primarily driven by the booming e-commerce sector, as reported by Adobe. The two e-commerce giants, Amazon (NASDAQ: AMZN) and eBay (NASDAQ: EBAY) reported heightened consumer activity throughout the weekend.
A standout trend observed during the weekend was the dominance of BNPL services. Shoppers collectively spent over $12 billion on platforms like Affirm and Klarna, marking a 20% increase from the same period in 2024.
The exceptional performance during the holiday weekend suggests that Affirm’s financial results are poised to surpass its earlier estimates released a few weeks ago. In its recent financial report, Affirm Holdings (NASDAQ: AFRM) disclosed a 37% surge in revenue, reaching $496 million, up from $361 million in the same quarter of 2022. The operating loss narrowed to $209 million, and the net loss slimmed to $171 million, showcasing growth in Gross Merchandise Volume (GMV) and improved profitability.
Analysts are optimistic about Affirm’s long-term prospects, particularly as inflation falls. Recent reports indicate that the headline Consumer Price Index (CPI) fell to 3.2% in October, with crude oil prices on a downward trajectory, suggesting a potential further decline in inflation in the coming months.
Lower inflation typically spurs increased consumer spending, a positive development for Affirm and fellow BNPL companies such as AfterPay and Klarna. In addition, the prospect of the Federal Reserve slashing interest rates in 2024 amid lower inflation levels bodes well for Affirm, leading to reduced financing costs and potential continued growth.