Affirm Surges on $750 Million Liberty Mutual Deal, Eyes $34 Billion Lending Target for 2025

On Friday, Buy Now, Pay Later (BNPL) firm Affirm Holdings AFRM will avail $750 million in funding from Liberty Mutual Investments (LMI) through June 2027. LMI expects to invest up to $5 billion in the program.

Affirm and LMI began their long-term capital partnership in 2019, followed by their forward flow loan purchase program in 2023.

Affirm stock gained after the report.

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Affirm needs investors’ money to accomplish its 2025 lending target of plus $34 billion, up by ~25% year-on-year, the Wall Street Journal reported, citing unnamed sources familiar with the matter. As per the report, the insurer initially agreed to invest $250 million in Affirm loans before expanding its commitment to $500 million.

The deal follows Affirm’s financing arrangements with Sixth Street Partners, which agreed to lend $4 billion, and the investment arm of Prudential Financial, which pledged $500 million. 

Blue Owl Capital agreed late last year to invest $2 billion in consumer loans originated by Upstart.

As of September 30, 2024, Affirm’s total funding capacity was $16.8 billion, growing by over 50% over the last two years. Affirm generated over $28 billion in gross merchandise volume (GMV) for the last twelve months ending September 30, 2024.

LMI invests over $100 billion of assets globally across an integrated platform for Liberty Mutual Group of Insurance Companies.

Affirm Holdings stock surged over 40% in the last 12 months as the artificial intelligence frenzy prompted funding activities without diluting ownership by stock issue, enabling a more flexible payment option for customers.

Last October, Wedbush analyst David J. Chiaverini expressed optimism over Affirm Holdings, citing the lower interest rate environment’s benefits through reduced funding costs and incremental GMV growth.

Affirm Stock Prediction For 2025

Equity research analysts on and off Wall Street typically use earnings growth and fundamental research as a form of valuation and forecasting. But many in trading turn to technical analysis as a way to form predictive models for share price trajectory.

Some investors look to trends to help forecast where they believe a stock could trade at a certain point in the future. Looking at Affirm Holdings, an investor could make an assessment about a stock's long term prospects using a moving average and trend line. If they believe a stock will remain above the moving average, which many believe is a bullish signal, they can extrapolate that trend into the future using a trend line. For Affirm Holdings, the 200-day moving average sits at $41.91, according to Benzinga Pro, which is below the current price of $57.94. For more on charts and trend lines, see a description here.

Traders believe that when a stock is above its moving average, it is a generally bullish signal, and when it crosses below, it is a more negative signal. Investors could use trend lines to make an educated guess about where a stock could trade at a later date if conditions remain stable.

Price Action: AFRM stock is up 2.87% at $58.39 at the last check on Friday.

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Photo via Affirm