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Affirm Poised for Slight Upside Amid Consumer Spending Strength, RBC Says

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Affirm Poised for Slight Upside Amid Consumer Spending Strength, RBC Says

Affirm (AFRM) is positioned to slightly beat fiscal fourth-quarter expectations amid resilient US consumer spending, RBC Capital Markets said in a client note e-mailed Monday.

The buy-now, pay-later service provider is scheduled to release its latest results on Thursday. RBC is projecting fourth-quarter revenue of $1.11 billion and adjusted operating income of $314 million.

"We expect slight upside from (Affirm), given the resilience in consumer spending shown across the payments sector in (second-quarter) earnings, along with intra-quarter check-ins with the company suggesting continued strength in consumer demand and credit performance," RBC analysts Daniel Perlin and Matthew Inglis said in the report.

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

Affirm's The Big Nothing event in May featured thousands of financing options at zero interest for eligible shoppers.

That resulted in 35% sales growth compared with a similar event held in October, according to RBC.

"Amid the inflationary environment, we believe that the combination of pressure on consumers' cash flows with strong employment continues to bode well for Affirm's product offering and expect continued momentum into the (fiscal fourth-quarter) print," Perlin and Inglis wrote.

RBC lowered Affirm's earnings-per-share estimates for 2026 and 2027, reflecting a higher tax rate. That drove its fiscal fourth-quarter EPS forecast to $0.36 from $0.38.

Price: $76.78, Change: $-0.25, Percent Change: -0.32%

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