Compass Point cuts Affirm to Sell, says ‘too early to call’ durable Inflection

As previously reported before the open, Compass Point downgraded Affirm to Sell from Neutral with a price target of $13, down from $14.50. The firm believes the risk of the loan sale environment remaining under pressure for a few more quarters is high and that it is “too early to call” for a durable GMV and margin inflection. At the same time, the firm believes consensus estimates are already pricing in a “reasonable” FY24 GMV at $24.3B, the analyst tells investors, adding that a tougher loan sales environment could reduce gain on sale margins and reduce front end economics.