Affirm's stock fell Thursday after Piper recommended investors sell, as higher rates and competition hurt revenue and lead to margin contraction.
Shares of Affirm Holdings Inc. were knocked down Thursday after Piper Sandler analyst Kevin Barker recommended investors sell, as higher rates and competition hurt revenue and lead to margin contraction.
“We... Shares of Affirm Holdings Inc. were knocked down Thursday after Piper Sandler analyst Kevin Barker recommended investors sell, as higher rates and competition hurt revenue and lead to margin contraction. “We expect persistently higher rates to pressure operating margins as [Affirm] needs to hold more loans on balance sheet,” Barker wrote in a note to clients. “In addition, we expect tighter underwriting standards, increased pricing and the re-introduction of student-debt payments to cause an incremental slowdown in revenue growth over the next year.”
Affirm generated $32.8 million, or roughly 9% of its fiscal third-quarter revenue, from gains on sales of loans, down from 14.9% in the second quarter and from 17.6% in the first quarter. At the same time, net loans held for investment were valued at $3.23 billion in the third quarter, down from $3.47 billion in the second quarter but well above the $2.19 billion in the first quarter.
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