AFRM Stock Collapses On Wide Misses And As One Key 2023 Metric Lags

Affirm Holdings (AFRM) reported a wider-than-expected loss for its June quarter late Thursday and issued a partially disappointing fiscal 2023 outlook, leading AFRM stock to collapse.

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The Street was looking for stronger guidance for gross merchandise volume — the total value of all transactions on Affirm’s platform.

For the year that began July 1, the “buy now, pay later” player predicted to $20.5 billion to $22 billion in gross merchandise volume. That lagged analyst estimates for $23.28 billion, according to FactSet.

In response, AFRM stock tumbled 14.3% near 26.90. The news slammed Affirm shares into their 50-day moving average, according to MarketSmith.com.

AFRM Stock: Merchandise Volume Outperforms

For its fiscal fourth quarter that ended June 30, Affirm reported $364.1 million in sales, growing 39% but narrowly missing forecasts for $365 million in sales. The company also lost 65 cents per share. The Street projected a smaller loss of 58 cents a share. Losses widened from 38 cents in the same three-month period last year.

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On a positive note, gross merchandise volume outgrew expectations. AFRM stock analysts called for a 64% increase to $4.08 billion. Affirm outdid that at $4.4 billion, surging 77%. The number of active customers also grew 96% to 14 million. Each active customer made about three transactions.

The guidance shook AFRM stock investors, though. Affirm also guided to $1.625 billion to $1.725 billion in sales, below calls for $1.91 billion.

Wall Street is closely watching Affirm’s efforts with an Amazon.com (AMZN) partnership agreement set to expire in January 2023. Affirm also partners with Walmart (WMT).

Further, Affirm faces new competition from Apple (AAPL) and Square-parent Block (SQ).

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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