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Affirm Boosts Growth With $500M PGIM Deal & New Merchant Partnerships
AFRMAffirm(AFRM) ZACKS·2024-12-04 19:50

Core Viewpoint - Affirm Holdings, Inc. has expanded its partnership with PGIM Fixed Income, which includes a 500millionprivatepurchaseofAffirm′sloans,enhancingitsfundingbaseandmerchantpartnerships,positioningthecompanyforgrowthinthebuynowpaylater(BNPL)market[1][2][3].Group1:PartnershipandFunding−PGIMFixedIncome′sinvestmentinAffirm′sloansunderscoresthequalityofAffirm′sloanportfolio,followingpreviousinvestmentsinAffirm′sasset−backedsecuritizationstotaling500 million private purchase of Affirm's loans, enhancing its funding base and merchant partnerships, positioning the company for growth in the buy now pay later (BNPL) market [1][2][3]. Group 1: Partnership and Funding - PGIM Fixed Income's investment in Affirm's loans underscores the quality of Affirm's loan portfolio, following previous investments in Affirm's asset-backed securitizations totaling 10 billion [2]. - Affirm's total funding capacity has increased by 50% over the past two years, reaching 16.8billionasofSeptember30,2024,whichwillimproveitsworkingcapitalandresourceallocation[3].Group2:MerchantNetworkExpansion−AffirmhasformednewpartnershipswithmajorretailerssuchasGarmin,Hotels.com,andLivingSpaces,expandingitsmerchantnetworktoover320,000partnersglobally[4].−Thecompanyhasexperienceda2016.8 billion as of September 30, 2024, which will improve its working capital and resource allocation [3]. Group 2: Merchant Network Expansion - Affirm has formed new partnerships with major retailers such as Garmin, Hotels.com, and Living Spaces, expanding its merchant network to over 320,000 partners globally [4]. - The company has experienced a 20% year-over-year increase in merchant growth and is now integrated with more than 60% of U.S. e-commerce, which is crucial as demand for BNPL options rises during the holiday season [4]. Group 3: Financial Projections - Affirm aims to achieve a fiscal 2025 Gross Merchandise Volume (GMV) objective of over 34 billion, with revenues projected to expand by at least 20 basis points from fiscal 2024 [5]. - The combination of enhanced funding capabilities and a growing merchant network positions Affirm to solidify its leadership in the BNPL space and attract more consumers [5]. Group 4: Stock Performance - Over the past year, Affirm's shares have surged by 83.9%, significantly outperforming the industry growth of 28.7% [6].