RBC Sees Massive Upside To Affirm: With Amazon, Shopify As Partners, Fintech Firm Back In The 'Driver's Seat'

Affirm Holdings Inc. (NASDAQ: AFRM) is back in the “driver’s seat” as its partnerships with Amazon.com Inc. (NASDAQ: AMZN) and Shopify Inc. (NYSE: SHOP) has helped dispel the notion Affirm was losing the competitive battle in the buy now, pay later, or BNPL, arena, according to RBC Capital Markets.

The Affirm Analyst: RBC analyst Daniel Perlin reiterated his Outperform rating on Affirm and raised the price target by about 42.5% to $124 from $87.

The Affirm Thesis: The combination of Shopify and Amazon as partners for Affirm has highlighted the sheer growth opportunity the two partnerships afford and has helped to quickly overtake the bear argument on Affirm being a financial services firm, Perlin said in a note to clients.

The two partnerships solidify BNPL as a payment option that has “staying power,” the analyst wrote.

See Also: Where Affirm Holdings Stands With Analysts

The timing of the Amazon announcement “could not have been better,” as Affirm’s top customer Peloton Interactive Inc.’s (NASDAQ: PTON) disappointing earnings and outlook were thought to be a negative readthrough to Affirm’s September 9th earnings, Perlin added.

Apple Impact: Affirm’s shares fell in mid-July after it was reported that tech giant Apple Inc. (NASDAQ: AAPL) was working on a plan to offer a BNPL product in partnership with Goldman Sachs Group Inc. (NYSE: GS). The stock rebounded in August after Apple was said to be launching a partnership with Affirm in Canada.

AFRM Price Action: Affirm shares closed 46.7% higher in Monday’s regular trading session at $99.59, but declined almost 0.4% in the after-hours session to $99.20.

Photo: Courtesy of Affirm