Payment network provider Affirm (AFRM) recently reported solid fourth-quarter results for fiscal 2025. In fact, the report led to a stock price increase of more than 10% on the following day.

Should you consider investing in AFRM stock after its post-earnings surge? Let's take a closer look.

About Affirm Stock

Based in San Francisco, California, Affirm is a prominent financial technology company offering innovative payment options. It allows consumers to divide their purchases into manageable installments at checkout, whether online or in-store. Focused on transparency and user empowerment, Affirm avoids hidden fees and traditional credit pitfalls. 

The company partners with merchants to generate revenue and utilizes advanced technology to assess borrower eligibility instantly. In addition to flexible payment solutions, Affirm offers services such as Adaptive Checkout and high-yield savings accounts, aiming to simplify financial decisions and promote responsible spending for both shoppers and businesses. The company has a market capitalization of $26.5 billion currently. 

AFRM stock is holding up well of late. Over the past 52 weeks, the stock has gained 105%, and shares are up by 40% year-to-date (YTD). After the company reported its Q4 results on Aug. 28, AFRM stock gained 10.6% in the following session. Shares also reached a 52-week high of $100 on Aug. 29, although they are now down 15% from this high.

Affirm’s Q4 Results Topped Estimates

On Aug. 28, Affirm announced solid Q4 results for fiscal 2025. Revenue for the period increased 33% year-over-year (YOY) to $876.42 million. This figure exceeded the $839.9 million that Wall Street analysts were expecting. 

At the heart of this growth was Affirm’s network revenue, which grew by 37% from the prior-year period to $306.57 million. Interest income stood at $419.09 million, up 24% YOY. The company also reported EPS of $0.20, a significant turnaround from the $0.14 loss per share in the year-ago period. Wall Street analysts were expecting EPS of $0.11 for the quarter. 

Affirm also recently expanded its partnership with Stripe, becoming the first buy-now-pay-later provider to be directly incorporated into the Stripe Terminal. This essentially means that shoppers physically accessing Stripe’s point-of-sale (POS) devices can now select the company’s services at checkout. This is important for Affirm because it likely implies that its transaction volume will increase, as well as its merchant adoption, without facing the burden of high integration costs. 

The company’s partnership with private credit firm Sixth Street — with plans to invest $4 billion in loans over three years — is expected to take effect gradually. During its Q2 fiscal 2025 earnings call, management made it clear that they are being very thoughtful about scaling this initiative and are considering ramping it up soon. 

For Q1 fiscal 2026, Affirm expects revenue to be in the range of $855 million to $885 million, while its adjusted operating margin is projected to be in the range of 23% to 25%. 

Wall Street analysts are considerably optimistic about Affirm’s future earnings, expecting EPS to grow 129% YOY to $0.09 in Q1 fiscal 2026. For the current fiscal year, EPS is projected to increase 427% annually to $0.79, followed by 78% growth to $1.41 in the next fiscal year. 

What Do Analysts Think About Affirm Stock?

After reporting solid Q4 results, Affirm received a slew of price target upgrades and reiterated ratings. Analysts at JPMorgan raised their price target from $91 to $94, while maintaining an “Overweight” rating on shares, citing solid growth in its gross merchandise volume (GMV). 

Citizens JMP raised its price target on Affirm from $75 to $105, while maintaining a “Market Outperform” rating due to the company’s better-than-expected quarterly results. Meanwhile, Evercore ISI analyst Adam Frisch maintained an “Outperform” rating, while raising his target from $67 to $100. 

Affirm is earning praise on Wall Street, with analysts awarding it a consensus “Moderate Buy” rating overall. Of the 27 analysts rating the stock, 17 give it a “Strong Buy” rating, one provides a “Moderate Buy” rating, and nine analysts play it safe with a “Hold” rating. AFRM stock has surpassed the consensus price target of $83.73. However, the Street-high price target of $115 indicates 35% potential upside from here.   

Key Takeaways

Affirm’s post-earnings pop is based on solid fundamentals that the company has shown, especially its 43% growth in GMV to $10.4 billion. Therefore, it might be wise for investors to consider a stake in the company’s development at this moment.