AAfirm! The one and only! [Long Term]

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I’ll do my best to tell you why Affirm [BNPL] is a good stock. I really like Affirm because they are growing fast to Amazon, Walmart and Target and over 13 other retailers are their customers. Seems like nothing can stop Affirm right now.Despite facing larger, more profitable competition, Affirm is priced as if it will be the largest BNPL provider, measured by GMV, in the world, on top of immediately achieving profitability.

Their Ceo: Affirm founder and CEO Max Levchin has a record of developing successful and innovative payment systems: he’s one of the founders of PayPal.

Why $AFRM could be valuable:
The buy-now-pay-later has enormous upward momentum. Sales have increased dramatically and the increase is expected to continue.

​McKinsey & Company’s annual POS Financing Survey found that about 60% of consumers are likely to use point-of-sale financing over the next six to 12 months.

Affirm does not charge late payment fees and has a fixed monthly payment system. This feature is attractive to users who are concerned with the complexities of credit card billing and payment.

​​Rapid user growth, high customer retention, and a rapidly expanding market add up to very strong growth prospects for $AFRM.We have recently seen that BNPL stock has declined, but Affirm range is 150-220 for long term we can see up to 300.

Over half of American consumers say they’ve used a BNPL service since the COVID-19 pandemic began, with 45% saying they use one at least once a month or more, C+R Research reports. These statistics suggest that retailers that want to remain competitive can no longer afford not to have a BNPL option in place.

Here is really good artical about Affirm and Crypto : Affirm founder Max Levchin on American Airlines deal, crypto

How Does Affirm Make Money?

Affirm makes money on the interest it charges for its consumer loans as well as fees paid by the merchants to handle payments on their behalf.

So far, the firm has stirred away from focusing on any other income channels. Given that the global market for online payments is valued at almost $5.5 trillion, there’s plenty of money to be made within its current business model.

‘‘Amazon recently expanded its partnership with Affirm, who’s now the exclusive BNPL provider for Amazon in the U.S. through January of 2023. Amazon received two tranches of Affirm warrants that span through 2025 and 2028 respectively, while they are subject to certain performance measures. Affirm’s BNPL solution will be an integrated payment option within Amazon Pay. This is an intriguing partnership as Amazon’s tested multiple BNPLs and chose to partner with Affirm and now Amazon is aligned with Affirm’s success.’’

Conclusion
If there is something you want to add just write. I’m not good at data so let it go to someone else. I will constantly update all information because I believe that Affirm will take over the BNPL market. The next earnings will be larger than we saw a couple of weeks ago. Affirm is growing fast.
I want to thank everyone and hope you have some criticism for me. Will be fun to talk Affirm with you guys!

Source Reddit - Dive into anything
Amazon Stock Is A Strong Buy On Fintech Growth (NASDAQ:AMZN) | Seeking Alpha

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Sorry I have not done DD on affirm before. Has been busy with life, and many missed earnings. But Affirm is trading on low grounds. Talks a bit about afirm in discord sometimes. But Affirm was pretty good to buy now 120-125, 140- 150we can see that it will go up again to its roots.

There are some other Affirm master out there and you know who you are, if you have some inputs pls share them :slight_smile:

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Just heard of this new interest free app that is starting to catch on. Wonder what effect it’ll have on affirm. I think mainly they are targeting PayPal but in general all of these interest free programs are competitors. Just keeping it on your radar.

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Affirm has been a long term hold in my IRA for a bit now. Klarna is also a great business. The BNPL space in general has been hot lately.

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Affirm is a lender and a middleman that connects other lenders with its users. The company offers loans from Cross River Bank and Celtic Bank. At the end of June, it reported it was also managing a $2 billion internal loan portfolio.

Affirm is looking to be a more “friendlier” alternative to credit cards for Millenials & Zoomers. As mentioned there are no late fees or hidden charges, you only pay the amount you agreed upon (they will typically give you different term lengths). Their website states: We don’t charge late fees. Even so, partial payments or late payments may hurt your credit score or your chances of getting another loan with us. That’s their polite way of saying if you miss a payment we will disable your ability to use our service until you’re current.

They consider the classic credit card providers (Amex / Visa / Mastercard) as legacy institutions. Predatory when you don’t pay in full or even just pay late. Also they charge merchants higher fees than their service.

Some competitors are: Sezzle, Afterpay, Klarna, and PayPal (and of course some CC’s like Amex do similar BNPL programs).

Kaleido Intelligence estimates that sales using this form of consumer spending (BNPL) will grow at an annual clip of 27% through 2025, facilitating a total of $258 billion worth of purchases by then.

Affirm considers an individual’s creditworthiness when offering them short-term loans, but it doesn’t rely exclusively on credit bureaus’ scoring systems. Rather, it uses its own proprietary scoring system called ITAC that grades potential buyers on a scale from 1 to 100; a score of 100 represents the lowest-risk borrowers.

  • Between FY 2019 & 2020 they had 77% growth.
  • In 2020 they added a FDIC insured savings account feature.
  • 96% of the company’s loans were considered “current” as of the end of June, down from 97.6% as of the end of 2020.
  • Only 65% of loans last quarter were offered to borrowers with the highest tier of credit scores, down from 78% two years ago.

It’s not just Affirm, though. Sezzle is seeing the same trends with its own loans. A year ago a little more than 95% of Sezzle’s borrowers were up-to-date on their payments. Now, less than 91% of its users are current on their loan agreement.

For users with credit so bad that they can’t get approved by Affirm, the Affirm Connect platform is integrating additional BNPL providers, the first of which is Katapult (a separate company, KPLT), a lease-to-own payment option, so that customers who aren’t approved by Affirm can get a secondary way to pay.

Even with the worst of the worst being denied by Affirm, the big question is if the uptick in users late on their payments is transient, or are we going to see the trend worsen?

As @Figos mentioned, Affirm has teamed up with some major retailers this holiday season as an alternative to using in-house layaway. This significantly reduces headaches / overhead for retailers that would otherwise have to process & hold these items until the customer paid for them completely (which could be weeks or months). It’s now an instant sale for the retailer, and the consumer walks out of the store with the item in-hand. It’s a win-win for everyone, so long as the consumer makes their payments.

I’m in on some shares, and plan to hold till next earnings to capture the boost in holiday shopping. I’m not sure how much longer after earnings I will continue to hold. Seeing as how I don’t think the economy will be recovering anytime soon in 2022, I believe there is a strong chance we could see a continued decline in top-tier borrowers at the expense of the company trying to boost their overall numbers… which in the end could trigger a BNPL version of the 2008 meltdown… and credit card companies will laugh saying that is why they charge the high interest rates.

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Thank you Beaker! I don’t think it will decline anytime soon. Only Thing we are looking for now is that they expand to other countries and make more deals and such. We have not seen Amazon profits not sure why they keeping it hidden. But 176,65 was their top this year. Im looking for 300 for a good news squeeze and you know Affirm always expands and make more deals after deals. 2022 will be very interesting for Affirm like you said they growing FAST!.

Some things we looking for is

  • Amazon profits
  • Crypto
  • Expanding
  • More deals
  • They are for their customers not other way around

Here is more of CEO Max Levchin

We saw this week’s affirm was at 120- and I know some people bought on discord on that dip. I think it will stay steady at 130-150 like it did a couple weeks ago.

Other thing is this is risky. If the US government regulates BNPL it will get scary. Not sure how things works in US but some of you maybe have more knowledge their.

I will keep you guys updated.

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Here’s something that came across an old search. Of course criminals will try and exploit new technological advances (see BTC):

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https://www.proxydocs.com/branding/966353/edocs/2021/issuer/

Meeting in one hour, we can see some bullish news

PS;: Thanks for squaretofu for headsup

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By the looks of PM trading today looks like the meeting was not really helpful?

I’m intrigued by AFRM’s drop here while seeing strength in V, MC, and PYPL. I’ve been reading about Americans willing to put more on their credit cards:

https://finance.yahoo.com/news/us-credit-card-applications-soar-123107230.html
https://www.marketwatch.com/story/americans-are-racking-up-credit-card-debt-again-as-mortgage-forbearance-ends-and-prices-continue-to-rise-11636474112

At first I thought this would be a boost to AFRM given that it acts like layaway but then I thought about credit card facilities for those struggling paycheck to paycheck. Monthly payments going out to AFRM for one product doesn’t provide the flexibility that CCs do. You can buy several items on CCs and also make bare minimum payments. But does this distinction make up for the disparity in AFRM with other payment providers?

I’m still bullish on AFRM in the long-term but for the next couple of months it’s unclear which direction the stock will move in relation to the overall market.

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Affirm Launches Cash Back Rewards with New Pay Now Feature in the Affirm App

https://www.affirm.com/press/releases/affirm-launches-cash-back-rewards

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Notice of CFPB inquiry I have received regarding BNPL providers (I am in a decision-making role at a financial institution). AFRM is specifically noted, and in fact is the first provider listed, as having received the order of collection for data:

CONSUMER FINANCIAL PROTECTION BUREAU OPENS INQUIRY INTO “BUY NOW, PAY LATER” CREDIT

Buy Now, Pay Later Expected to Set New Records for Lending this Holiday Season

WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) issued a series of orders to five companies offering “buy now, pay later” (BNPL) credit. The orders to collect information on the risks and benefits of these fast-growing loans went to Affirm, Afterpay, Klarna, PayPal, and Zip. The CFPB is concerned about accumulating debt, regulatory arbitrage, and data harvesting in a consumer credit market already quickly changing with technology.

“Buy now, pay later is the new version of the old layaway plan, but with modern, faster twists where the consumer gets the product immediately but gets the debt immediately too,” said CFPB Director Rohit Chopra. “We have ordered Affirm, Afterpay, Klarna, PayPal, and Zip to submit information so that we can report to the public about industry practices and risks.”

Buy now, pay later credit is a type of deferred payment option that generally allows the consumer to split a purchase into smaller installments, typically four or less, often with a down payment of 25 percent due at checkout. The application process is quick, involving relatively little information from the consumer, and the product often comes with no interest. Lenders have touted BNPL as a safer alternative to credit card debt, along with its ability to serve consumers with scant or subprime credit histories.

Merchants are adopting BNPL programs and are willing to typically pay 3 percent to 6 percent of the purchase price to the companies, similar to credit card interchange fees, because consumers often buy more and spend more with BNPL. Indeed, BNPL’s use has spiked during the COVID-19 pandemic and throughout the holiday shopping season. More and more Americans are using it, and the most recent Black Friday and Cyber Monday shopping weekend saw massive growth in BNPL. This explosive growth has caught the eye of many investors, including significant venture capital money. Big tech companies are also entering the arena.

The law requires that the CFPB monitor consumer financial markets and enables the agency to require market players to submit information to inform this monitoring. The CFPB expects to publish aggregated findings on insights learned from this inquiry. Today’s orders seek to illuminate the range of these consumer credit products and their underlying business practices. Specifically, the Bureau is concerned about:

  • Accumulating debt : Whereas the old-style layaway installment loans were typically used for the occasional big purchase, people can quickly become regular users of BNPL for everyday discretionary buying, especially if they download the easy-to-use apps or install the web browser plugins. If a consumer has multiple purchases on multiple schedules with multiple companies, it may be hard to keep track of when payments are scheduled. And when there is not enough money in a consumer’s bank account, this can potentially result in charges by both the consumer’s bank and the BNPL provider. Because of the ease of getting these loans, consumers can end up spending more than anticipated.
  • Regulatory arbitrage : Some BNPL companies may not be adequately evaluating what consumer protection laws apply to their products. For example, some BNPL products do not provide certain disclosures, which could be required by some laws. And while the BNPL application may look similar to a standard checkout with a credit card, protections that apply to credit cards may not apply to BNPL products. Many BNPL companies do not provide dispute resolution protections available to users of other forms of credit, like credit cards. And finally, depending on what rules the lender is following, different late fees and policies apply.
  • Data harvesting : BNPL lenders have access to the valuable payment histories of their customers. Some have used this collected data to create closed loop shopping apps with partner merchants, pushing specific brands and products, often geared toward younger audiences. As competitive forces pressure the merchant discount, lenders will need to find other sources of revenue to maintain growth and profitability. The Bureau would like to better understand practices around data collection, behavioral targeting, data monetization and the risks they may create for consumers.

The BNPL product has seen growth internationally and many other countries are also taking a close examination of its providers. As part of today’s inquiry, the Bureau is working with its international partners in Australia, Sweden, Germany and the UK, specifically the Financial Conduct Authority. The Bureau will also be coordinating with the rest of the Federal Reserve System, as well as its state partners.

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I’m not concerned about CFPB at all, just a scary game. If you didn’t buy the dip at 93-95 that sucks.

Here is some bullish news. Affirm Welcomes CFPB! even Max the CEO has worked for CFPB.

Affirm investors will welcome 2022!!! and earnings are gonna be on fire!

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New Partner, uhm yep Affirm keep going

https://www.affirm.com/press/releases/newegg-partners-with-affirm

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if i expected this than so did a lot of other people. it’s a battle of public opinion now with the CFPB trying it’s best to look like they’re protecting consumers but probably at the encouragement of credit card lobbyists. i didn’t know that AFRM CEO worked for CFPB. makes me believe it will be easier for him to navigate through this probe than other CEOS

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Here’s some bullish news for AFRM:

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Also, a partnership with Visa for a debit card, but it’s from Benzinga, and as Kryptek has noted has been corroborated with another source.

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Beaker also recalled seeing an article somewhere that AFRM is a possible acquisition target at these price levels but I can’t seem to find it. Hard to argue that it isn’t attractive at these levels though.

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Hello :wave: affirm earnings is tomorrow after market close 10th.

With the holiday and all the new partners I’m so bullish that they will have great outcome. Wow gonna be fun to se Amazons revenue.

Last earnings i didn’t say anything (sorry) and it rally hard.

I have not been here lately because of real life stuff. I know lot of people here have an eye on affirm and sure have great input on underlaying stuff. Okey times up cya tomorrow for the big day :blush::slightly_smiling_face:

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