Affirm stock price forms broadening wedge ahead of Q1 earnings

November 07, 2023 02:00 AM AEDT | By Invezz

Affirm stock price forms broadening wedge ahead of Q1 earnings — Image source: Invezz

Affirm earnings ahead

Affirm is one of the leading Buy Now Pay Later (BNPL) companies in the United States. The company provides its solutions to more than 16.5 million customers and over 254k active merchants. It competes with the likes of PayPal, Block, and Klarna.

Affirm stock price has rebounded in the past few days as investors reacted to the strong financial results by companies like PayPal, SoFi, and Block. These companies published moderately strong result, which was encouraging since they have been embattled recently.

The company also did well after its relationship with Amazon expanded this month. It has now become the first BNPL company to offer a checkout option in a platform that caters to companies. As a result, companies using Amazon Business will be able to split the cost of purchases.

The next catalyst for Affirm stock price will be the upcoming earnings, which are scheduled for Wednesday. Analysts believe that the company’s revenue rose to $444.4 million, up from $361 million in the same quarter in 2022.

In its guidance, the company said that its revenue will be between $430 million and $455 million. It also expects that its Gross Merchandise Volume (GMV) will be between $5.3 billion and $5.54 billion. For the year, the company hopes to generate over $24 billion.

Affirm is still facing numerous challenges. High interest rates are a major challenge for Affirm. They make its cost of capital quite expensive, slow consumer spending, and lead to high delinquency rates.

Watch here: https://www.youtube.com/embed/GvM3RFuKQgM?feature=oembed

Affirm stock price forecast

AFRM chart by TradingView

The daily chart shows that the AFRM share price has made a bullish breakout in the past few days. This rebound happened after the shares retested the lower side of the ascending channel shown in blue.

It has also retested the important resistance point at $22.70, the highest level on February 2nd. The stock has also jumped above the 50-day 25-day Exponential Moving Averages (EMA) while the Relative Strength Index (RSI) has drifted upwards.

Therefore, the outlook for the shares is bullish, with the next point to watch being at $25.50, the highest swing on September 18th. The bullish view is also being confirmed by the rising broadening wedge pattern. The alternative scenario is where the shares drop to the lower side of the channel at $1684.

The post Affirm stock price forms broadening wedge ahead of Q1 earnings appeared first on Invezz

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