Affirm stock price forecast: set to enter beast mode soon

Affirm stock price has done well this year, and is hovering at its highest level since 2022 as demand for its services rise. It was trading at $71.88, up by 725% from its lowest level in 2023.

Technicals suggest that Affirm stock could keep rising

A closer look at the weekly chart suggests that the AFRM stock price has more upside to go in the near term. After bottoming at $8.30 in 2022, the stock has now surged to above $70. 

Affirm has successfully moved above the 23.6% retracement point at $48, and has just arrived at the 38.2% point. Most importantly, it has already moved above the crucial resistance level at $52.4, its highest level in December last year. Moving above that level invalidated the bearish double-top chart pattern. 

Affirm shares have also moved above the ascending trendline that connects the lowest swings since April 2023. It has also moved above the 50-week moving average, while the Relative Strength Index (RSI) and the MACD indicator have all pointed upwards.

Affirm shares have also retested the upper side of Andrew’s pitchfork tool. Therefore, the path of the least resistance for the stock is bullish, with the next point to watch being at $92.62, the 50% retracement point, which is about 30% above the current level. 

A break above that resistance level will lead to further gains to $122.40, the 61.8% retracement point. On the other hand, a drop below the key support at $60 will invalidate the bullish view.

Read more: Affirm stock price is soaring: will AFRM surge to $100 soon?

AFRM’s business is doing well

Affirm is a leading player in the buy now, pay later (BNPL), which is expected to have spectacular growth in the next decade. Data shows that the sector was estimated at $6.13 billion in 2022 and that it would grow by about 26% until 2030.

BNPL service providers are often seen as better alternatives to credit card companies because they are cost-efficient. Unlike credit card companies, BNPL players like Affirm don’t charge interest for most of their services.

Instead, the company pays for the purchase and then takes a commission from the seller. Users then pay the cash in four installments. 

Affirm has also introduced other interest-bearing products that affect customers seeking a longer timeframe to pay. 

Its annual reports suggest that Affirm’s business has done well in the past few years. Its annual revenue has jumped from $509 million in 2019 to over $2.3 billion in the last financial year. It has already made $2.54 billion in the trailing twelve months.

Affirm has also made progress reducing its losses. It had a net loss of over $985 million in 2022, followed by $517 million in 2023 and $446 million in the TTM.

The most recent financial results showed that Affirm’s gross merchandise volume (GMV) rose by 35% in the last quarter to $7.6 billion. Its active customers jumped to 19.5 million, while revenue jumped by 41% to $698 million. 

Analysts expect that Affirm’s business will continue doing well this year. The average estimate is that its revenue will grow by 36% in the current quarter to $806 million, bringing its annual figure to $3.1 billion. Its revenue for next year will grow to $3.77 billion.

Most importantly, Affirm has deals with some of the biggest retailers in the US like Amazon and Walmart. It has also inked partnership deals with Apple, Home Depot, and Chewy.

Therefore, with Affirm, we have a company with a solid market share in a growing industry, is narrowing its losses, and is seeing sustainable revenue growth. A combination of its strong technicals and fundamentals point to more gains ahead.

Read more: Here’s why Affirm stock could surge another 50%

The post Affirm stock price forecast: set to enter beast mode soon appeared first on Invezz