Max Levchin, co-founder of PayPal and CEO of fintech company Affirm, arrives at Sun Valley Resort to attend the annual Allen & Company Sun Valley Conference in Sun Valley, Idaho.
Drew Angerer | Getty Images
to be sure Apple Inc. shares surged 34% on Thursday and were on track for their best day in nearly three years, after the buy-now, pay-later loan company beat the top and bottom lines in its earnings report.
If the rally continues, it would be the stock's third-biggest gain since the company's IPO in January 2021. The stock was trading at $42.17 as of afternoon.
After the market closed on Wednesday, Affirm said revenue in the fiscal fourth quarter rose 48% from a year earlier to $659 million, and its net loss narrowed to $45.1 million from $206 million in the year-ago period. The company beat revenue estimates and reported a smaller-than-expected loss.
Affirm expects revenue in the current quarter to be between $640 million and $670 million. Analysts surveyed by LSEG had expected revenue of $625 million.
Affirm CEO Max Levchin said in a note to shareholders that the company has set a new goal of achieving operating profitability on a GAAP basis by the fourth quarter of fiscal 2025.
In a note Thursday, analysts at Mizuho Bank called the quarter a “killer quarter” for Affirm, saying that “the potential to turn GAAP operating income positive” would be a “huge achievement.”
Even after Thursday’s rally, Affirm shares are still down about 14% for the year, while the Nasdaq is up 18%. But the stock has been on a bull run lately, rising 50% in August. Federal Reserve Chairman Jerome Powell signaled Friday that lower interest rates could come as soon as September.
Bank of America analysts said in a note last month that the rate cut would be beneficial to Affirm’s financing costs and to gains on loan sales. The company moved its dealers to a maximum 36% annual interest rate on loans, up from 30% previously, and the analysts said that “should continue to be a tailwind for revenue growth and the value of merchandise traded.”
Mizuho expects to have a new product. apple The payments partnership could add $12 billion to Affirm's total target market once it launches later this year.
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