Fintech company, Affirm Holdings’ (NASDAQ: AFRM) new Debit+ card offering got a big thumbs-up from Mizuho Securities analyst Dan Dolev. Affirm’s new Debit+ card offering is a combination of a pay now and a buy now, pay later (BNPL) debit card. The analyst stated that judging from Google (GOOGL) searches for Affirm’s Debit+ card, it was creating a strong buzz similar to Block’s (SQ) Cash card back in its early days in 2017.
The analyst suggested that if the Debit+card follows Block’s Cash card trajectory, “it may boost AFRM’s medium-term volume CAGRs (compounded annual growth rates) from mid-20s to mid-30s.” While Dolev admitted that the new card may lower revenues less transaction costs as a percentage of gross merchandise volume but the “incremental volume and revenue growth benefit should be positive catalysts and help offset potential sales headwinds from the upcoming student loan refinancing.”
Dolev raised his revenue estimate for Affirm in FY24 to $2.11 billion from an earlier estimate of $2.07 billion and in FY25 expects the company to generate $2.56 billion in revenues as compared to his prior estimate of $2.45 billion.
The analyst is upbeat about the stock with a Buy rating and raised his price target to $20 from $17, implying an upside potential of 22.8% at current levels.
Shares of AFRM shot up by more than 7% in morning trading at the time of publishing following Dolev’s bullish views.
Besides Dolev, other analysts remain sidelined on AFRM stock with a Hold consensus rating based on three Buys, five Holds, and four Sells.
