Aug 29 (Reuters) - Affirm Holdings' AFRM.O shares jumped in premarket trading on Friday, after the buy-now-pay-later firm forecast fiscal year 2026 gross merchandise value above Wall Street estimates, signaling resilient consumer spending.
Relief from tariff uncertainty, although temporary, and hopes of rate cuts in the back half of 2025 have driven consumer spending across categories and helped card companies and payment firms.
"At a category level, general merchandise, electronics, travel and ticketing, and fashion and beauty were significant contributors to overall growth," the company said in its shareholder letter.
Affirm forecast fiscal year 2026 gross merchandise value (GMV) - the total dollar amount of all transactions on its platform - to be more than $46 billion, above analysts' consensus of $45.67 billion, according to data compiled by LSEG.
"We expect GMV growth will continue at 30%+ year on year and think Affirm can eventually be as big as the traditional point of sale credit card providers," BTIG analysts said in a note.
But the BTIG analysts expect margin pressure in the near term due to increased competition from traditional credit cards and other fintechs.
The company reported a revenue of $876.4 million for the quarter ended June 30, beating estimates of $837 million, driven by strong income from interests.
Affirm's shares were up 15.1% at $92.06 on Friday. If premarket gains hold, the company is set to hit an over three-year high.
The stock has gained nearly 31% so far in 2025 as of last close, outperforming the 11% rise in the broader benchmark S&P 500 index .SPX.
At least three brokerages, including J.P.Morgan and Jefferies, have raised their price targets on Affirm's stock after the company's quarterly results.
The median price target of the 25 analysts covering the stock is $75 as on Friday, up from $66 in May, and none of them recommend selling Affirm, according to LSEG data.
(Reporting by Pritam Biswas in Bengaluru; Editing by Leroy Leo)
((Pritam.Biswas@thomsonreuters.com;))
