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Affirm Holdings Inc Cl A(AFRM-Q)

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Why Affirm Holdings Stock Soared Today

Motley Fool - Tue Dec 19, 2023

Shares of Affirm Holdings(NASDAQ: AFRM) were up 15.9% as of 1:45 p.m. ET Tuesday after the buy now, pay later (BNPL) payment-platform company announced an expanded partnership with Walmart(NYSE: WMT).

A seamless new BNPL option

In a press release this morning, Affirm announced it has expanded its services with Walmart to enable customers to select its pay-over-time options at self-checkout kiosks in more than 4,500 Walmart stores. Affirm's services were previously available on Walmart's website and at stores nationwide but not at the self-checkout stations, which comprised around 30% of all retail transactions last year.

Affirm elaborated that its research has shown more than half of Americans are looking for retailers to offer a BNPL option at checkout. And 76% of consumers would either delay or forego a purchase entirely without the option. Affirm also stressed that customers who opt for a buy-now-pay-later option at checkout are always shown the total cost of their purchase, including interest. And because Affirm doesn't charge late or hidden fees, they'll never pay more than they agree to upfront.

What's next for Affirm stock?

Affirm stock has already roared higher in recent weeks as data showed BNPL purchases were up 20% year over year in the weekend following Black Friday -- an event widely considered the start of the key holiday-shopping season. But if Affirm can capitalize on even the tail end of the season while giving consumers the option to bolster their purchasing power at self-checkout kiosks indefinitely going forward, it's easy to see how the expanded partnership could drive significant incremental growth.

Assuming the timing of its past reports are any indication, Affirm should be poised to release its holiday-quarter results in early February. Management's latest guidance calls for quarterly revenue to arrive in the range of $495 million to $520 million, up from $400 million in the same year-ago period.

To be clear, I don't own shares of Affirm myself. And I'm personally content watching this story play out from the sidelines with Affirm up an incredible 460% year to date as of this writing. But it's no surprise to see the leading BNPL stock continuing to gain momentum right now.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.

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