Citizens has increased its price target for Affirm Holdings Inc. to $105.00 from an undisclosed previous level and maintained a Market Outperform rating on the shares. The firm says the new target implies approximately 123% upside from Affirm's current market price of $47.13, which is down about 41% over the past six months.
In its analysis, Citizens argues that Affirm can reach sufficient operating scale across the coming years driven by growth in gross merchandise volume (GMV). The firm projects that Affirm's net margin profile will eventually mirror that of Discover Financial Services, a comparison Citizens used when setting take-rate and net-margin assumptions for its model. Citizens noted Affirm's recent revenue growth of 33% as supportive evidence for the expansion thesis, citing InvestingPro data.
The $105 target is the outcome of a five-year projection that runs through fiscal 2030. Citizens applied specific GMV growth assumptions across that horizon and used a take rate and net margin aligned with Discover Financial Services to estimate future profitability. Projected earnings were then discounted and Citizens applied a growth-oriented price-to-earnings multiple of about 25 times to derive a $102 price target before additional adjustments.
Citizens then added $3 per share to reflect the value of Affirm's net operating loss carryforwards, which the firm values at roughly $1 billion in aggregate. The combined adjustments bring Citizens' valuation to $105 per share. On the basis of Citizens' internal estimates, that $105 figure corresponds to about 28 times the firm’s estimate of Affirm's adjusted operating income in 2027.
Citizens also highlighted Affirm's current trading multiples. The stock is trading at a price/earnings-to-growth (PEG) ratio near 0.26, which Citizens and InvestingPro interpret as the shares being attractively valued relative to the company's growth prospects.
Recent company results and peer analyst moves provide additional context. Affirm reported fiscal second-quarter revenue of $1.12 billion, a 30% year-over-year increase, topping Stephens' revenue estimate of $1.05 billion. Following those results, Stephens lowered its price target for Affirm to $65 from $75, citing peer multiple compression. By contrast, Compass Point increased its price target to $68 from $64 and maintained a Buy rating based on what it described as strong execution and projected adjusted earnings per share. Goldman Sachs reiterated a Buy rating with an $83 price objective, pointing to Affirm's solid financial results and the firm's typical "beat and raise" outcome despite prevailing market headwinds.
Beyond earnings and analyst revisions, Citizens' note and other reports reference strategic business developments. Affirm announced a partnership with Lowe's to provide flexible payment plans that let customers split purchases into biweekly or monthly payments. The offering includes payment plans starting at 0% APR for eligible customers and emphasizes real-time eligibility determinations and transparent costs.
Market reactions have been mixed across related fintech names. Affirm and Block stocks initially declined on investor concerns about artificial intelligence disruption but trimmed losses later amid reports of acquisition interest in PayPal, which itself had seen a notable stock decline.
Summary
Citizens raised its price target on Affirm to $105, based on a five-year forecast that assumes strong GMV growth and eventual margin parity with Discover Financial Services, adding $3 per share for NOLs and applying a growth-oriented 25x P/E multiple. The target implies about 123% upside from a recent share price of $47.13.
Key points
- Citizens set a $105 target and kept a Market Outperform rating, implying 123% upside from the current $47.13 share price.
- The valuation is built on a five-year GMV-led growth forecast to fiscal 2030 with take-rate and net margin assumptions similar to Discover Financial Services.
- Affirm reported fiscal Q2 revenue of $1.12 billion, up 30% year-over-year, and several firms have adjusted price targets and ratings in response to the results.
Risks and uncertainties
- Peer multiple compression: Stephens lowered its price target citing pressure on comparable company multiples, which could affect Affirm's market valuation - relevant to the financials and equity markets sectors.
- Market sensitivity: Affirm and related fintech stocks have shown susceptibility to thematic concerns such as AI disruption, creating volatility risks in fintech and payments sectors.