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Affirm's Fiscal Q4 Provisions Due to Product, Funding Mix, Not Credit Deterioration, BofA Says

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Affirm's (AFRM) provision density movements in fiscal Q4 were due to the loan product and funding mix rather than international exposure or deteriorating underlying credit, BofA Securities said Friday.

According to management commentary on the earnings call, card growth remains fully organic with zero contribution from the Fiserv (FISV) bank issuance partnership, and fiscal 2027 gross merchandise value guidance was seen as a floor rather than a base case, with more conservatism incrementally incorporated into later year funding deals,

BofA highlighted a set of growth vectors, including a potential bank charter, business-to-business relationships, UK long duration lending, and brand sponsored promotions, that were not included in guidance, according to the note.

BofA kept a buy rating on Affirm and raised its price target to $104 from $93.

Shares of Affirm rose 6.5% in Friday trading.

Price: $83.09, Change: $+5.60, Percent Change: +7.23%

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