BNPL lender Affirm’s shares tumble after gloomy full-year revenue forecast
2022.08.26 14:49
Shopping trolley is seen in front of Affirm logo in this illustration, July 24, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) – Shares of Affirm Holdings Inc tumble 13% in premarket trading on Friday after the buy-now-pay-later lender’s full-year revenue forecast missed Wall Street estimates, underscoring the broader downturn in the fortunes of the once high-flying fintech sector.
Rising rates, geopolitical turmoil and a sector-wide sell-off in high-growth technology stocks have together hit investor sentiment, leading to billions being shaved off the company’s market cap with shares down nearly 70% so far this year.
Affirm said on Thursday it expects full-year 2023 revenue between $1.63 billion and $1.73 billion, below Wall Street views of $1.9 billion, according to Refinitiv data.
“In light of the uncertain macroeconomic backdrop, we are approaching our next fiscal year prudently,” said Chief Financial Officer Michael Linford.
The fintech is among the top trending tickers on retail investor-focused forum StockTwits on Friday, with message volumes surging over 200% on the stock.
Analysts at RBC Capital Markets wrote in a note they see management’s forecast for the current quarter and upcoming fiscal year as “cautiously optimistic”. The brokerage lowered its price target on the stock and added Affirm has noted lower consumer credit quality, driving the company’s wary outlook.
Red hot inflation has also played spoilsport for consumer finance companies as surging costs dampen purchasing power and force Americans, especially those in the lower income bracket, to tighten their purse strings.
The company said it expects revenue in the first quarter to be between $345 million and $365 million, missing analysts’ expectations of $386 million.
Affirm’s loss in the fourth quarter ended June 30 widened to $186.4 million compared with $123.4 million a year earlier.
Shares in other popular fintech names Block Inc and Upstart (NASDAQ:UPST) Holdings Inc also down between 2% and 3% before the bell.
