To The Moon

$Affirm Holdings, Inc.(AFRM)$ $Airbnb, Inc.(ABNB)$ $Amazon.com(AMZN)$ 

Executive Summary:

I’m convinced Affirm has entered its profitability inflection point, transforming BNPL from a concept into a structural rerating story. The company not only delivered a major earnings beat but also secured a five-year extension with Amazon through January 2031; this locks in long-term volume visibility and de-risks future growth. Affirm posted record Q1 FY2026 GMV of $10.8B, up 42% year over year, revenue of $933M, and a net profit of $81M, swinging from last year’s $100M loss. The stock traded around $72.44 after earnings and remains coiled below the critical 0.786 Fibonacci resistance at $92.56. RSI sits near 50, MACD is trending positive, and Ichimoku Tenkan support holds firm at $65.71. I’m eyeing a break above $92.56 as the trigger toward $105 and a $115 stretch target. Short interest is moderate at 4.64% of float (14.97M shares) and options flow shows strong call accumulation, including the $85 December 2025 strike. In contrast, peers such as Airbnb ($ABNB), DraftKings ($DKNG), and Peloton ($PTON) all reported mixed or weak results, amplifying Affirm’s relative strength. With CPI cooling to 2.9% and the Fed signaling rate cuts, Affirm stands as a structural beneficiary of consumer resilience and embedded finance tailwinds.

💰 Financial Performance Breakdown:

Q1 GMV reached $10.8B, beating consensus of $10.35B and rising 42% YoY. Total revenue climbed 34% to $933M. Revenue Less Transaction Costs (RLTC) expanded 60% to $455.2M, representing 4.2% of GMV versus 3.8% last year, confirming operating leverage. Operating income swung to $63.7M from a $132.6M loss, while net income turned positive at $80.7M. EPS came in at $0.23, more than doubling expectations of $0.11. Active consumers grew 24% to 24.1M, and transactions per user increased 20% to 6.1. The Affirm Card continues to scale rapidly, with GMV surging 135% to $1.43B and active cardholders reaching 2.8M. Ninety-six percent of volume was driven by repeat buyers, reinforcing ecosystem stickiness. Guidance was robust. Management expects Q2 GMV between $13B and $13.3B, up roughly 31% YoY, with revenue in the $1.03B–$1.06B range. For FY2026, Affirm forecasts GMV exceeding $47.5B, RLTC around 4.0% of GMV, and adjusted operating margin above 27%. Sequential growth moderation reflects tougher holiday comps and completion of an enterprise merchant transition, but profitability and unit economics remain strong. The $750M New York Life loan buyout unlocks $1.75B in additional funding capacity, strengthening the balance sheet.

🛠️ Strategic Headwinds & Execution Risk:

Credit risk remains the top variable; 30+ day delinquencies edged up sequentially to approximately 2.1% but improved YoY, consistent with seasonality. Management maintains underwriting discipline and confirmed stable approval rates between 67% and 78%. RLTC margins now at 4.2% are near the company’s philosophical upper bound, implying reinvestment to drive new merchant and card growth. Regulatory oversight from the CFPB remains ongoing, but Affirm’s transparent pricing and credit reporting leadership mitigate headline risk. Execution focus lies on scaling the Affirm Card to more than 5M users and expanding distribution via wallets and payment service providers. The company’s PSP and ISV channels grew GMV nearly 70% YoY, underscoring diversification. Macro risks such as slower retail spending or a delayed Fed cut could temper sentiment, but Affirm’s short loan durations and proprietary data model offer rapid adaptability.

🧠 Analyst & Institutional Sentiment:

Wall Street is warming to the structural pivot. JPMorgan’s Reginald L. Smith reiterated Overweight with a $94 PT, BofA’s Jason Kupferberg raised to $98, and Morgan Stanley’s high target sits at $120.75. Truist holds at $95 and Wells Fargo initiated Overweight at $90. Consensus now averages around $97, implying 34% upside. Institutional positioning supports the rerating, with 987 institutions holding stakes (up 10% QoQ). Hedge fund rotation has been measured; Coatue exited, but Baillie Gifford maintained exposure and ABS inflows from New York Life reinforce conviction. Options flow has been strongly bullish, particularly in December 2025 calls at $85, with put-call ratios compressing to 0.6. Short interest remains modest at 4.64% of float, or two days to cover, leaving room for a technical squeeze if volume surges above $80.

📉📈 Technical Setup:

The chart is primed for an explosive resolution. Following the 2021 rally from $8.62 to $176.65, price has coiled beneath long-term Fibonacci and Ichimoku compression zones. On the monthly timeframe, the Tenkan sits at $65.71, acting as strong support, while price consolidates below $92.56 resistance. RSI around 52 and MACD positive signal torque building under the surface. Bollinger Band width is just 8%, far below its 15% average, indicating volatility compression before expansion. A sustained breakout above $92.56 on volume above 10M shares confirms continuation toward $105 base and $115 stretch. Downside invalidation lies near $64, just below the Tenkan and Keltner lower band. The technical setup mirrors historical expansion phases that delivered 100%+ multi-quarter rallies.

🌍 Macro & Peer Context:

Affirm’s structural resilience is reinforced by macro alignment. CPI at 2.9% and core at 3.1% position the Fed for additional 25bp cuts, lowering funding costs and supporting BNPL margins. Consumer spending remains strong at 2.8% real growth with 2.7% PCE, indicating continued capacity for installment-based spending. Tariffs lifted effective rates to 17%, but e-commerce adoption continues to expand at a 12% annual clip, directly benefiting Affirm’s embedded payments model. Peers underscore Affirm’s dominance: $ABNB missed EPS expectations ($2.21 vs. $2.31) and $DKNG missed revenue ($1.14B vs. $1.22B). $SQ’s results were mixed and $PTON stagnated, while Affirm’s GMV growth outpaced the group. The Amazon extension secures roughly 20% of Affirm’s volume base through 2031, and the Worldpay partnership introduces exposure to $400B in incremental payment flow. Global BNPL penetration remains under 1% in the U.S., giving Affirm decades of runway.

📊 Valuation & Capital Health:

Affirm trades at approximately 45x forward P/E compared to legacy lenders at 15x, justified by a 34% revenue growth trajectory and positive EPS inflection. The company’s PEG ratio around 1.2 and EV/sales of 7.2x trail higher-multiple fintech peers despite superior profitability momentum. Free cash flow turned positive at $609M over the trailing twelve months. RLTC margins at 4% of GMV highlight efficiency at scale, while ABS financing such as the New York Life tranche reduces cost of capital without dilution. Cash sits at $1.36B, and no major maturities loom near term. If FY2026 GMV surpasses $48B and RLTC holds at 4%, projected revenue near $4.2B implies valuation support at $84 minimum, rising toward $105–$115 with expansion multiple re-rating.

⚖️ Verdict & Trade Plan:

My stance is Buy. I’m entering between $70 and $78 with stop-loss around $60 beneath Tenkan support. Base target is $105, stretch $115. Confirmation requires breakout above $92.56 on volume exceeding 10M shares and bullish options skew continuation. Upcoming catalysts include the December Q2 guidance update, Fed policy meeting on December 18, and further Amazon or Shopify integration detail. Position sizing around 5% of portfolio provides balance between exposure and risk. Should delinquencies exceed 2.5% or GMV growth slip below 30%, partial trimming at $60 will protect gains. Affirm’s execution quality, profitability trajectory, and technical compression collectively define a high-conviction asymmetric setup.

🏁 Conclusion:

I am convinced this is not a rebound but a redefinition. Profitability has landed, the Amazon partnership is secured, and technical compression is poised to expand. Affirm has transitioned from a speculative BNPL play to a scalable payments infrastructure story. The market may not yet see it, but the data confirms it. Execution verified, fundamentals reinforced, asymmetry loaded. When the breakout ignites, it will not be luck; it will be inevitability.

📌 Key Takeaways:

GMV Q1 ’26: $10.8B (+42% YoY)

Revenue Q1 ’26: $933M (+34% YoY)

Net Income: $81M profit vs. $100M loss last year

RLTC of GMV 4.2%, above 3–4% target range

Affirm Card GMV +135% to $1.43B; 2.8M active cardholders

Amazon partnership extended to 2031; New York Life $750M funding expansion

Technical trigger: break above $92.56 confirms $105 / $115 targets

Analyst PTs: JPMorgan $94, BofA $98, Morgan Stanley $120.75, consensus $97

Short interest 4.64% of float; options flow bullish

Trade plan: buy $70–$78, stop-loss $60, volume >10M confirms breakout

Relative strength vs. $ABNB, $DKNG, and $SQ reinforces leadership

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