Affirm Holdings, Inc. (AFRM): A Bull Case Theory

We came across a bullish thesis on Affirm Holdings, Inc. on Deep Value Returns’s Substack. In this article, we will summarize the bulls’ thesis on AFRM. Affirm Holdings, Inc.'s share was trading at $72.92 as of October 14th. AFRM’s trailing and forward P/E were 516.20 and 85.47 respectively according to Yahoo Finance.

Affirm Holdings, Inc. (AFRM) stands as one of the leading providers in the Buy Now, Pay Later (BNPL) space, benefiting from the ongoing structural shift toward flexible consumer credit and digital payments. The company’s business fundamentals remain strong, with growth momentum across its core lending and merchant network segments. Despite this, market sentiment has yet to catch up with Affirm’s operational progress, as investors remain skeptical about the durability of the BNPL model and its profitability trajectory.

This disconnect has left the stock trading at an attractive valuation—just 27x forward free cash flow—remarkably low for a business expected to grow nearly 28% year over year. Affirm’s scalable platform, expanding merchant partnerships, and strong consumer engagement position it well to capture share from traditional credit systems and benefit from rising e-commerce penetration. The company’s disciplined credit underwriting and increasing repeat customer activity also suggest improving unit economics and a clearer path toward sustained profitability. Given these factors, Affirm offers a compelling mix of growth and undervaluation.

As the market begins to recognize the company’s accelerating earnings power and cash flow generation, multiple expansion could follow. The long-term thesis remains intact, with management executing well and macro conditions stabilizing for consumer spending. With continued top-line growth and improving financial efficiency, Affirm’s fair value could reach $140 per share by early 2027, implying substantial upside from current levels. Overall, AFRM represents a high-conviction growth opportunity with a favorable risk/reward profile for long-term investors.

Previously we covered a bullish thesis on Block, Inc. (XYZ) by Long-Term Pick in March 2025, which highlighted the company’s strong growth across Square and Cash App, expanding margins, and improving free cash flow as it transformed into a full commerce platform. The company's stock price has appreciated approximately by 16.66% since our coverage. The thesis still stands as Block maintains robust fintech fundamentals. Deep Value Returns shares a similar view but emphasizes Affirm’s leadership in Buy Now, Pay Later, focusing on rapid growth and improving unit economics in digital lending.

Affirm Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 70 hedge fund portfolios held AFRM at the end of the second quarter which was 63 in the previous quarter. While we acknowledge the potential of AFRM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.