Affirm Holdings, Inc. AFRM recently announced that it has expanded its partnership with PGIM Fixed Income, a Prudential Financial, Inc. PRU company.  Under this partnership, PGIM Fixed Income completed a $500 million private purchase of Affirm’s loans. Affirm also announced new merchant partnerships with prominent retailers, adding to its merchant network.

Earlier, PGIM Fixed Income invested in Affirm’s public asset-backed securitizations. Affirm has issued 21 asset-backed securitizations worth $10 billion to more than 130 capital partners. This purchase by PGIM Fixed Income highlights the good quality of AFRM’s loans. As the buy now pay later (BNPL) experiences transformational shifts, AFRM’s asset will be an attractive investment opportunity for alternative investors.

AFRM will benefit from improved working capital, which will aid it in investing its resources effectively and timely to grow its business. This move also strengthens Affirm’s funding base, which now boasts a 50% increase in total funding capacity over the past two years to $16.8 billion as of Sept. 30, 2024.

Affirm also announced partnerships with retailers like Garmin, Hotels.com, and Living Spaces, boosting its network to over 320,000 partners globally. With a 20% year-over-year increase in merchant growth, Affirm is now integrated with more than 60% of U.S. e-commerce. These partnerships are critical, as demand for BNPL options surges during the holiday season.

Partnerships like these should aid the company in achieving its fiscal 2025 GMV objective of more than $34 billion. Revenues, as a percentage of GMV, are projected to expand at least 20 basis points from the fiscal 2024 figure. By combining stronger funding capabilities with an ever-growing merchant network, Affirm is poised to solidify its leadership in the BNPL space, attract more consumers, and continue driving merchant growth.

Affirm’s Price Performance

Over the past year, shares of Affirm have surged 83.9% compared with 28.7% growth of the industry it belongs to.

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AFRM’s Zacks Rank & Other Key Picks

Affirm currently has a Zacks Rank #2 (Buy).

 A couple of other top-ranked stocks in the Business Services space are Parsons Corporation PSN and Huron Consulting Group Inc. HURN. While Parsons sports a Zacks Rank #1 (Strong Buy), Huron carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The bottom line of Parsons outpaced estimates in each of the last four quarters, the average surprise being 17.49%. The Zacks Consensus Estimate for PSN’s 2024 earnings indicates an improvement of 40.7% from the 2023 reported figure. The consensus mark for revenues implies growth of 24.2% from the 2023 figure. The consensus mark for PSN’s earnings has moved 1.2% north in the past 30 days. 

The bottom line of Huron Consulting outpaced estimates in each of the last four quarters, the average surprise being 19.09%. The Zacks Consensus Estimate for HURN’s 2024 earnings indicates an improvement of 23% from the 2023 reported figure. The same for revenues implies growth of 8.6% from the 2023 number. The consensus mark for HURN’s earnings has moved 1% north in the past 30 days.

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Prudential Financial, Inc. (PRU) : Free Stock Analysis Report

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