Affirm Holdings (AFRM) Registers a Bigger Fall Than the Market: Important Facts to Note

Affirm Holdings (AFRM) closed the most recent trading day at $76.58, moving -2.41% from the previous trading session. The stock's change was less than the S&P 500's daily loss of 0.18%. Elsewhere, the Dow lost 0.85%, while the tech-heavy Nasdaq lost 0.06%.

Shares of the operator of digital commerce platform have depreciated by 3.46% over the course of the past month, underperforming the Computer and Technology sector's gain of 1.48%, and the S&P 500's gain of 3.33%.

Investors will be eagerly watching for the performance of Affirm Holdings in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $0.33, reflecting a 65% increase from the same quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $1.11 billion, reflecting a 26.39% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $1.23 per share and revenue of $4.21 billion, which would represent changes of +720% and +30.62%, respectively, from the prior year.

Any recent changes to analyst estimates for Affirm Holdings should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.21% higher. Affirm Holdings is currently a Zacks Rank #2 (Buy).

In terms of valuation, Affirm Holdings is presently being traded at a Forward P/E ratio of 45.5. This expresses a premium compared to the average Forward P/E of 21.6 of its industry.

We can also see that AFRM currently has a PEG ratio of 3.19. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. AFRM's industry had an average PEG ratio of 1.21 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 107, placing it within the top 44% of over 250 industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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