Goldman Analyst Is Bullish About This Buy Now, Pay Later Underwriting Company

Affirm Holdings Inc AFRM has been in focus on news of Apple Inc AAPL discontinuing Apple Pay Later.

The company provides the "most modern credit solutions" and has a diverse portfolio of products for point-of-sale financing for consumers and everyday spending, according to Goldman Sachs.

The Affirm Holdings Analyst: Will Nance assumed coverage of Affirm Holdings from Michael Ng. He kicks off with a Buy rating and price target of $42.

The Affirm Holdings Thesis: Affirm's underwriting is more sophisticated than other fintechs and the company has a strong track record of "achieving well managed credit outcomes despite growing faster than peers," Nance said in the initiation note.

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Affirm Holdings should enjoy a competitive advantage given the precision of its underwriting, "allowing the company to underwrite deeper in the credit spectrum and penetrate the subprime/near-prime part of the market, a space which has been difficult for many incumbents to sustainably participate in," the analyst wrote.

Affirm Holdings is poised for market share gains, given its underwriting precision, secular tailwinds that favor “buy now, pay later” and Pay-in-4 offerings and the company's "impressive distribution with major e-com platforms," Nance state. He added that the company should become "one of the first new closed-loop platforms in the payments ecosystem."

AFRM Price Action: Shares of Affirm Holdings had risen by 6.66% to $31.86 at the time of publication on Monday.

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