Affirm Holdings' Debit+ Card Holds Tremendous Potential To Boost Volumes, Bullish Analyst Says

Mizuho analyst Dan Dolev reiterated a Buy rating on Affirm Holdings Inc AFRM, raising the price target to $20 from $17.

The analyst remained particularly bullish on AFRM's recently launched Debit+ card, which allows customers to pay now or overtime at the point of sale in conjunction with the Affirm app.

The analyst thought Debit+ was innovative as it expanded where consumers could use AFRM online, offline and in electronic wallets. 

While management had yet to provide was an update on the performance of the Debit+ card, as Google Trends showed an ample increase in interest level since March 2023, the analyst noted.

Dolev saw the potential for ~250% volume CAGR from Debit+ through FY26. 

The card could drive up total GMV CAGR from about 20%-25% to about 30%-35% with a boost to RLTC from mid-20%s close to 30%.

From an RLTC perspective, the analyst expects Debit+ to have little impact in FY24. 

Based on the above, the analyst raised FY24 total revenue estimate to $2.113 billion from $2.066 billion and the FY25 total revenue estimate to $2.555 billion from $2.445 billion, based on the anticipated success of Debit+. 

Dolev trimmed the adjusted operating income losses in the outer years. 

For FY23, the analyst expected total revenue to increase 15% year-over-year to $1.548 billion. EPS loss was expected to be ($3.57).

AFRM Price Action: Affirm Holding shares are trading higher by 10.15% to $16.28 on the last check Tuesday. 

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