Affirm (AFRM) presented a "strong case" for achieving its updated "medium-term growth targets," driven by merchant point-of-sale financing, direct-to-consumer expansion and international growth, RBC Capital Markets said in a note Wednesday.
The company is targeting $100 billion in gross merchandise volume, up from about $46 billion currently, while also forecasting stronger revenue margins and annual GAAP earnings per share of about $3 to $4. It also highlighted the Affirm "Card," enterprise merchant expansion and international partnerships as "key growth drivers," according to the note.
Affirm's funding model is becoming a "competitive advantage" as the company scales, lowering funding costs through its network of about 200 "unique funding partners." A pending industrial bank charter could further strengthen the company's funding capabilities through deposits and loan origination, RBC said.
RBC also pointed to "emerging opportunities" in agentic commerce and Affirm Edge, which embeds buy now, pay later services into banking apps through partnerships with "large commerce" companies.
RBC has a sector perform rating on Affirm, with a price target of $80.
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