In a report released yesterday, Will Nance from Goldman Sachs maintained a Buy rating on Affirm Holdings (AFRM – Research Report), with a price target of $56.00.
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Will Nance has given his Buy rating due to a combination of factors related to the financial impact of Affirm Holdings’ partnership with Walmart. The recent disclosure by Affirm indicated that Walmart accounts for a smaller portion of their gross merchandise volume and operating income than previously estimated, leading to a reassessment of the financial implications.
Despite the lower profitability of the Walmart portfolio, which is attributed to the challenges of underwriting Walmart’s customer base and the tough commercial terms Walmart negotiates, the overall impact on Affirm’s financials is less severe than initially thought. This has led to an increase in Affirm’s estimates and a revised price target, which, although lower than before the announcement, reflects a more favorable outlook given the reduced operating income headwind.
AFRM’s price has also changed slightly for the past six months – from $44.000 to $47.960, which is a 9.00% increase.