Consumer Pressure Rises, but So Does Demand for Affirm's Services

In recent interviews with CNBC and Bloomberg, Affirm Holdings, Inc. AFRM CEO Max Levchin pointed to growing pressure on U.S. consumers from higher gas prices and inflation. Rising everyday costs are squeezing household budgets, but they are also making installment payments more useful, prompting more shoppers to turn to Affirm to preserve cash or spread out larger purchases.

That does not automatically make a tougher economy bullish for Affirm. The key is how much stress consumers can absorb. Moderate pressure can lift demand without materially weakening credit quality. Severe pressure is different. If borrowers move from wanting more flexibility to simply being unable to afford purchases, delinquencies and charge-offs can rise, forcing Affirm to tighten approvals and absorb higher credit costs.

So far, the operating picture looks more supportive than alarming. Affirm has continued to post strong growth in gross merchandise volume (up 36% in the fourth quarter of fiscal 2026), revenues (up 33%) and active users (up 21%), while credit trends remain manageable. Its underwriting model also gives it room to decline higher-risk applications, adjust credit limits and require down payments as risk conditions change. Affirm's 30+ day delinquency rate on monthly installment loans was 2.5%, down 26 basis points sequentially, although it was 19 basis points higher year over year.

Funding conditions remain worth watching, but the broader picture is constructive. As long as repayment trends remain stable and underwriting stays disciplined, rising demand for flexible payments could continue supporting Affirm’s growth while keeping credit performance on a healthy footing.

AFRM’s YTD Price Performance

Over the year-to-date period, shares of Affirm have declined 2.9% against the 0.8% growth of the industry it belongs to.

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Zacks Rank & Key Picks

Affirm currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader payments space are Remitly Global, Inc. RELY, Usio, Inc. USIO and Repay Holdings Corporation RPAY. While Remitly Global currently sports a Zacks Rank #1 (Strong Buy), Usio and Repay Holdings are carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Remitly Global’s current-year earnings indicates a 390.6% year-over-year surge to $1.57 per share. It has witnessed one upward estimate revision and no downward movement over the past 30 days. The consensus estimate for RELY’s current-year revenues is pegged at $1.98 billion, implying 21.4% year-over-year growth.

The Zacks Consensus Estimate for USIO’s current-year earnings indicates an 88.9% year-over-year improvement. USIO has witnessed one upward estimate revision over the past month against no cuts. The consensus estimate for current-year revenues indicates 13.9% year-over-year growth.

The Zacks Consensus Estimate for Repay Holdings’ current-year earnings indicates 26.8% year-over-year growth. RPAY witnessed one upward estimate revision over the past month and no downward movement. The consensus estimate for current-year revenues implies a 60.1% year-over-year jump.

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

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