Personal Loan Stocks Q2 Results: Benchmarking Affirm (NASDAQ:AFRM)

As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the personal loan industry, including Affirm (NASDAQ:AFRM) and its peers.

Personal loan providers offer unsecured credit for various consumer needs. The sector benefits from digital application processes, increasing consumer comfort with online financial services, and opportunities in underserved credit segments. Headwinds include credit risk management in unsecured lending, regulatory oversight of lending practices, and intense competition affecting margins from both traditional and fintech lenders.

The 9 personal loan stocks we track reported an exceptional Q2. As a group, revenues beat analysts’ consensus estimates by 4.9% while next quarter’s revenue guidance was 1.4% below.

Thankfully, share prices of the companies have been resilient as they are up 6.7% on average since the latest earnings results.

Affirm (NASDAQ:AFRM)

Founded by PayPal co-founder Max Levchin with a mission to create honest financial products, Affirm (NASDAQ:AFRM) provides a payment network that allows consumers to make purchases and pay for them over time with transparent, flexible installment loans.

Affirm reported revenues of $876.4 million, up 33% year on year. This print exceeded analysts’ expectations by 4.7%. Overall, it was a stunning quarter for the company with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Interestingly, the stock is up 12.2% since reporting and currently trades at $89.73.

We think Affirm is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q2: Dave (NASDAQ:DAVE)

Named after the biblical David fighting financial Goliaths, Dave (NASDAQ:DAVE) is a digital financial services platform that helps Americans living paycheck to paycheck with cash advances, banking services, and tools to improve their financial health.

Dave reported revenues of $131.8 million, up 64.5% year on year, outperforming analysts’ expectations by 16%. The business had an incredible quarter with a beat of analysts’ EPS estimates.

Dave achieved the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 17.4% since reporting. It currently trades at $197.50.

Is now the time to buy Dave? Access our full analysis of the earnings results here, it’s free.

Slowest Q2: Nubank (NYSE:NU)

With nearly 94 million customers across Brazil, Mexico, and Colombia through its viral member-get-member referral program, Nubank (NYSE:NU) is a digital banking platform that offers financial services including spending, saving, investing, borrowing, and protection products to millions of customers across Latin America.

Nubank reported revenues of $2.64 billion, up 20.8% year on year, exceeding analysts’ expectations by 1.3%. It was a satisfactory quarter as it also posted EPS in line with analysts’ estimates.

Interestingly, the stock is up 23.7% since the results and currently trades at $14.85.

Read our full analysis of Nubank’s results here.

Sezzle (NASDAQ:SEZL)

Founded in 2016 as an alternative to traditional credit cards for younger shoppers, Sezzle (NASDAQ:SEZL) provides a payment platform that allows consumers to split purchases into four interest-free installments over six weeks at participating retailers.

Sezzle reported revenues of $98.7 million, up 76.4% year on year. This number beat analysts’ expectations by 4%. It was an exceptional quarter as it also logged a beat of analysts’ EPS estimates.

Sezzle pulled off the fastest revenue growth among its peers. The stock is down 38.9% since reporting and currently trades at $85.27.

Read our full, actionable report on Sezzle here, it’s free.

FirstCash (NASDAQ:FCFS)

Offering a financial lifeline to the unbanked and credit-constrained since 1988, FirstCash (NASDAQ:FCFS) operates pawn stores across the U.S. and Latin America while also providing retail point-of-sale payment solutions for credit-constrained consumers.

FirstCash reported revenues of $830.6 million, flat year on year. This print topped analysts’ expectations by 1%. Overall, it was a strong quarter as it also recorded a beat of analysts’ EPS estimates and a decent beat of analysts’ EBITDA estimates.

FirstCash had the slowest revenue growth among its peers. The stock is up 12.9% since reporting and currently trades at $150.83.

Read our full, actionable report on FirstCash here, it’s free.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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