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Affirm Soars after Unveiling New Amazon Integration
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Affirm Soars after Unveiling New Amazon Integration

For a payments service like Affirm Holdings (NASDAQ:AFRM), one of, if not the biggest keys to success, is being available in enough places that people will actually use the service. For Affirm, getting in on Amazon (NASDAQ:AMZN) is pretty much a Holy Grail sort of point. That’s just what happened, and that explains why Affirm is up substantially in Tuesday afternoon’s trading.

The recent move allows Amazon customers to use Affirm’s Adaptive Checkout service, which in turn offers up a set of pay-over-time options. Included are both bi-weekly and monthly payment plans and the use of these payment plans adds no costs to the purchase. It also makes no changes, good or bad, to a user’s credit score.

Andrew Jeffrey, a Truist analyst, noted that the move would “boost visibility, merchant and consumer adoption,” though trying to quantify exactly how much difference the move would make would be “difficult to quantify.” A 2021 study from RBC Capital Markets noted that a buy-now-pay-later (BNPL) option, like the ones Affirm offers through its Adaptive Checkout system, not only raises conversion rates by between an estimated 20% and 30% but also hikes average ticket sizes as much as an estimated 50%.

However, the rest of the analyst pool is split on just how well Affirm is likely to do going forward. With four Buys, five Holds, and one Sell rating, Affirm stock is considered a Moderate Buy by analyst consensus. However, with an average price target of $15 per share, it also comes with 10.34% downside risk.

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