What Happened?
Shares of buy now, pay later company Affirm (NASDAQ:AFRM) jumped 6.9% in the afternoon session after BMO Capital Markets raised its price target on the stock, coupled with growing excitement for its upcoming earnings report and news of large banks increasing their holdings.
BMO Capital Markets lifted its price target on Affirm to $86.00 ahead of the company's fourth-quarter fiscal 2026 earnings report, scheduled for August 27. Confidence in the stock was also reinforced by regulatory filings showing major institutions like Bank of America and Royal Bank of Canada had recently increased their stakes. This accumulation by large investors signals rising conviction in the company's prospects.
The shares closed the day at $78.29, up 6.7% from the previous close.
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What Is The Market Telling Us
Affirm’s shares are extremely volatile and have had 44 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 12.7% on the news that it reported stellar second-quarter results that surpassed Wall Street's expectations and swung to a profit. For the quarter, the company announced revenue of $876.4 million, a 33% year-over-year increase that beat analyst estimates. Affirm also posted a GAAP profit of $0.20 per share, a significant turnaround from the loss of $0.14 per share recorded in the same quarter last year and well ahead of Wall Street's expectations. Adding to the positive sentiment, management provided an upbeat revenue forecast for the upcoming third quarter, with its guidance of $870 million at the midpoint topping analyst projections.
Affirm is up 5.8% since the beginning of the year, but at $78.35 per share, it is still trading 15% below its 52-week high of $92.18 from September 2025. Investors who bought $1,000 worth of Affirm’s shares 5 years ago would now be looking at an investment worth $1,188.
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