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Affirm Continues to Stand Out From Peers in Buy Now, Pay Later Space, RBC Says

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Affirm Continues to Stand Out From Peers in Buy Now, Pay Later Space, RBC Says

Affirm (AFRM) continues to widen its lead over peers in the buy now, pay later space, RBC Capital Markets said in a client note following the company's latest quarterly results.

On Thursday, the buy-now, pay-later service provider reported per-share earnings of $4.62 for the fiscal fourth quarter, up from $0.20 a year earlier. Revenue climbed 33% to $1.17 billion. Both metrics topped Wall Street's estimates.

Gross merchandise volume, or GMV, jumped 36% to $14.1 billion in the fiscal fourth quarter, about 5% ahead of the market's forecast, according to RBC. For fiscal 2027, the company expects GMV of more than $64 billion. Revenue less transaction costs is pegged at around 4.16% of GMV for the fiscal year.

RBC estimates Affirm to record GMV of $64.3 billion, revenue of $5.5 billion and revenue less transaction costs of $2.7 billion for fiscal 2027, up from its prior projections of $62 billion, $5.1 billion and $2.6 billion, respectively.

Shares of Affirm rose 9% in Friday trading.

The company's ability to drive GMV growth, stable take rates and improving funding costs, among other factors, indicate its unique ability to satisfy various stakeholders, including consumers, merchants and capital markets funding participants.

Affirm's fourth-quarter results, full-year guidance and overall resilience of its consumer base show that there are several "points of distinction" between the company and other players in the BNPL space, RBC said.

RBC has a sector perform rating on Affirm's stock and lifted its price target to $96 from $80.

Last month, rival PayPal (PYPL) raised its full-year adjusted earnings guidance after reporting second-quarter results above Wall Street's views.

Price: $84.42, Change: $+6.93, Percent Change: +8.94%

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