So-called "buy now, pay later" stock Affirm Holdings revisited a buy point and is holding support at a short-term moving average. This makes the company's place on the elite IBD 50 Growth Stocks To Watch list worth highlighting on Monday.
Affirm boasts that it offers shoppers flexible payment plans without late or annual fees. The company works with retail giants such as Amazon.com, Walmart and Target, as well as luxury fashion name Gucci.
The IBD 50 name was also a recent IBD Stock Of The Day.
The "buy now, pay later" provider says it has a network of over 337,000 merchants. It recently added digital wallet options and now works with small businesses, including sole proprietors.
Affirm earns fee revenue from businesses and interest on some items from shoppers.
Its business model offers consumers an alternative to using a credit card. Users know their payments upfront and can choose from options including an interest-free, four-payment plan or monthly installments with interest.
On Aug. 6, Affirm said it extended its partnership with Boot Barn Holdings as its exclusive provider of the payment model known as "buy now, pay later."
Affirm Stock Is In A Buy Zone
Affirm stock has formed a deep, V-shaped cup-with-handle base with a 73.11 buy point. Shares blew past the entry on Aug. 4 to start a four-day rally, before reversing lower Friday.
A 2% gain during Monday's session lifted the stock back in the 5% buy zone that extends to 76.77. Shares bounced off their 21-day exponential moving average Monday, finding support and successfully testing their 50-day moving average on Aug. 1.
The IBD MarketSurge Growth 250 name has outperformed 96% of stocks in Investor's Business Daily's database and has climbed 21% so far this year.
Its IBD Accumulation/Distribution Rating of B+ indicates fairly heavy institutional buying over the last 13 weeks. And its 1.9 up/down volume ratio shows positive demand over the last 50 days.
'Buy Now, Pay Later' Proves Profitable
Affirm is expected to turn its first annual profit of 5 cents per share in fiscal 2025 — its year-end was June 30 — and Wall Street's earnings estimate soars to 85 cents per share in fiscal 2026.
The company is scheduled to post its fiscal fourth-quarter earnings results on Aug. 28.
In its fiscal third quarter, it reported a profit of 9 cents per share vs. a loss of 43 cents per share in the prior year. Sales increased 36%, a slowdown from the 45% average over the last three quarters.
Analysts forecast fiscal fourth-quarter earnings of 12 cents per share on sales of $837 million, or 27% growth.
Follow Kimberley Koenig for more stock market news on X, the platform formerly known as Twitter, @IBD_KKoenig.
