Affirm (NASDAQ:AFRM) Sets New 1-Year High - Is It Still a Buy?

Affirm Holdings, Inc. (NASDAQ:AFRM) shares soared to a new 52-week high during trading on Friday, reaching an impressive $79.82 before settling at $78.74 by the end of the day, with a total of 497,882 shares changing hands. This is a notable increase from the previous close of $79.28.

Recent Analyst Ratings Updates

Throughout recent weeks, Affirm has received various updates from research analysts. For instance, Mizuho increased its target price for the stock from $65.00 to $69.00, reaffirming an "outperform" rating in a report dated November 19th. Additionally, Citizens JMP upgraded its rating from "hold" to "strong-buy" on December 20th. Wells Fargo also raised its target price significantly from $70.00 to $85.00, while maintaining an "overweight" rating on February 7th. Morgan Stanley opted to lift its target from $39.00 to $55.00 with a rating of "equal weight" on January 28th. On the same day, Compass Point changed its rating from a "sell" to "neutral" and increased its price target from $20.00 to $61.00. Overall, nine analysts have given Affirm a "hold" rating, ten have issued a "buy" rating, and one analyst gives it a "strong buy." According to data from MarketBeat.com, there is an average consensus rating of "Moderate Buy," with a target price estimate of $70.24.

Affirm's Recent Performance

Despite reaching these highs, Affirm's stock saw a slight decline of 0.1%. The company maintains a 50-day moving average of $63.71 and a 200-day moving average of $50.57. The debt-to-equity ratio stands at 2.50, while both its quick and current ratios are at 12.60. Affirm currently has a market capitalization of $24.88 billion, a PE ratio of -121.63, and a beta of 3.66.

In its latest earnings announcement on February 6th, Affirm reported earnings of $0.23 per share, surpassing the consensus estimate of ($0.21) by a notable margin. However, the company continues to struggle with a negative return on equity of 7.29% and a negative net margin of 7.10%. Analysts forecast that Affirm will post an EPS of -0.59 for the ongoing year.

Insider Trading Activities

In other developments, Chief Operating Officer Michael Linford sold 400,000 shares in a transaction dated December 12th, receiving approximately $68.99 per share, leading to a total of $27,596,000. This sale resulted in an 82.40% reduction in Linford's shares, leaving him with about 85,420 shares valued at roughly $5.89 million. Similarly, CFO Robert O'Hare sold 11,218 shares at an average price of $70.00 on November 22nd, totaling around $785,260. Over the past 90 days, insiders have sold a total of 1,038,626 shares worth approximately $70.69 million, and insiders currently own 12.41% of the company’s stock.

Institutional Ownership Insights

A number of large institutional investors have recently adjusted their stakes in Affirm. Geneos Wealth Management increased its holdings by 356.5% in the fourth quarter, now owning 525 shares valued at $32,000 after adding 410 shares. R Squared Ltd and Strategic Investment Solutions also acquired new stakes in the fourth quarter, worth about $33,000 and $43,000, respectively. Moreover, Advisors Asset Management boosted its stake by 168.2%, now owning 1,070 shares valued at $44,000, while Venturi Wealth Management saw a significant increase of 200.5% in the third quarter. Overall, institutional investors control 69.29% of Affirm's stock.

About Affirm

Affirm Holdings, Inc. operates in the digital and mobile-first commerce space across the U.S., Canada, and other markets. The company offers a point-of-sale financing solution that enables consumers to pay for purchases over time, with terms that can extend up to 60 months. Additionally, Affirm’s platform includes merchant commerce solutions and a consumer-oriented mobile app.

Conclusion

With its stock reaching a new high and various analysts updating their ratings and price targets, investors are keenly watching Affirm's next steps. While the company shows potential, it's essential to consider the mixed signals from earnings reports and insider trading activity when deciding whether to invest.

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