Why Affirm (AFRM) Shares Are Getting Obliterated Today

Affirm Holdings Inc AFRM shares are trading lower by 18.16% to $13.11 Thursday morning. The company on Wednesday reported worse-than-expected second-quarter financial results and issued third-quarter and FY23 guidance below analyst estimates.

What Happened?

Affirm reported a quarterly loss of $1.10 per share, which missed the analyst consensus estimate of a loss of 98 cents. The company also reported quarterly sales of $399.56 million, which missed the analyst consensus estimate of $416.30 million by 4%. This sales figure is a 10.7% increase over sales of $361.01 million in the same period last year.

Affirm also announced a 19% reduction in total team members. Affirm says the company expects to otherwise keep the company's headcount flat for the foreseeable future. This change will cause the company to incur roughly $35 million-$39 million in total restructuring costs.

Additionally, Affirm management says that in the second-quarter, the company successfully redirected the substantial majority of R&D efforts towards margin-improving projects, repeat customer engagement, and Debit+ and plans to continue executing this roadmap for several quarters moving forward.

Analyst Rating Updates

Additionally, AFRM received a number of analyst rating updates Thursday including:

• RBC Capital analyst Daniel Perlin downgraded from Outperform to Sector Perform and announced $17 price target.
• Piper Sandler analyst Kevin Barker maintained with a Neutral and lowered the price target from $16 to $13.
• Credit Suisse analyst Timothy Chiodo maintained with a Neutral and lowered the price target from $21 to $16.
• Mizuho analyst Dan Dolev maintained with a Buy and lowered the price target from $20 to $18.

According to data from Benzinga Pro, AFRM has a 52-week high of $83.57 and a 52-week low of $8.62.