Threats To Buy Now Pay Later Firms May Be Overstated, Analyst Says. Buy This Stock After The Selloff

  • Mizuho analyst Dan Dolev recommended buying shares of Affirm Holdings, Inc AFRM on yesterday's weakness and reiterated a Buy rating on the name with a $42 price target.
  • The U.S. Consumer Financial Protection Bureau looked to regulate "buy-now, pay-later" companies like Klarna and Affirm following concerns that their fast-growing financing products are harming consumers.
  • CFPB director Rohit Chopra disclosed that the CFPB would issue guidance or a rule to align sector standards with credit card companies and implement appropriate supervisory examinations.
  • Dolev considered the Consumer Financial Protection Bureau's buy now pay later report as "less harmful than feared." 
  • The "lack of a clear call for action is a positive," he noted.
  • Instead, the CFPB says it will be "working with state regulators...on examinations of these firms."
  • Moreover, while they identified significant risks like offering similar rights and protection to credit card companies, they also praised BNPL, citing lower financial costs versus legacy products which is a positive sign. 
  • Price Action: AFRM shares traded lower by 4.11% at $23.01 on the last check Friday.
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