Should You Buy, Hold or Sell Affirm Stock Before Q1 Earnings Report?

Leading buy now, pay later (BNPL) solution provider Affirm Holdings, Inc. AFRM is set to report its first-quarter fiscal 2026 results on Nov. 6, 2025, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s bottom line is currently pegged at an earnings of 11 cents per share on revenues of $885 million.

The fiscal first-quarter earnings estimate has improved by 1 cent over the past 60 days. The bottom-line projection indicates a 135.5% year-over-year improvement. Also, the Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 26.7%.

For fiscal 2026, the Zacks Consensus Estimate for Affirm’s revenues is pegged at $3.99 billion, implying a rise of 23.9% year over year. The consensus mark for the current fiscal year’s EPS is pegged at 86 cents, implying a massive improvement from 15 cents a year ago.

Affirm beat the consensus estimate for earnings in each of the last four quarters, with the average surprise being 105.5%.

Affirm Holdings, Inc. Price and EPS Surprise

Affirm Holdings, Inc. price-eps-surprise | Affirm Holdings, Inc. Quote

Affirm’s Q1 Earnings Whispers

Our proven model predicts a likely earnings beat for the company this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is precisely the case here.

AFRM has an Earnings ESP of +3.53% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Now, let’s see how things have shaped up before the fiscal first-quarter earnings announcement.

Q1 Factors to Note for Affirm

Merchant network revenues are likely to have benefited from an expanding Gross Merchandise Volume (GMV). Also, the active merchants figure is expected to have witnessed a significant boost in the fiscal first quarter due to the company’s ability to strike deals with different businesses. The Zacks Consensus Estimate for merchant network revenues is pegged at $247.9 million, indicating a 34.5% rise from the prior-year quarter’s figure. 

The consensus mark for GMV for the fiscal first quarter implies 36.6% growth from the prior-year quarter’s number. Management anticipates the metric to be in the range of $10.1-$10.4 billion.

An increase in the number of transactions conducted through the Affirm platform is likely to have been supported by higher active merchants and consumers. The Zacks Consensus Estimate for active consumers indicates 20.8% year-over-year growth. Also, the consensus mark for transactions per active consumer suggests a 12.4% rise from the year-ago period.

An increase in the usage of Affirm’s virtual cards is expected to have driven card network revenues. The consensus mark for card network revenues indicates a 38.3% improvement from the year-ago quarter’s number. Meanwhile, the Zacks Consensus Estimate for interest income is pegged at $435.9 million, which implies a 15.6% year-over-year rise.

The consensus mark for servicing income is pegged at nearly $37 million, which indicates a 42.3% jump from the year-ago quarter. However, the quarterly results are likely to have witnessed higher transaction costs. Nevertheless, the company expects the adjusted operating margin to be within 23-25%.

Affirm’s Price Performance Comparison

Affirm stock has exhibited an upward movement, gaining a notable percentage over the year-to-date period. It has jumped 18.4% compared with the industry’s growth of 14.8%. In comparison, PayPal Holdings, Inc. PYPL, which also has a major footprint in the BNPL space, has declined 19.9% during this time. Visa Inc. V, which is a rather traditional credit and debit card solutions provider and a major payments company, has gained 6.6% year to date. Meanwhile, AFRM stocks have outperformed the S&P 500 significantly, which has increased 17.9%.

Price Performance – AFRM, PYPL, V, Industry & S&P 500

Affirm’s Valuation

Now, let’s look at the value Affirm offers investors at current levels.

Along with the recent share price appreciation, Affirm’s valuation appears stretched relative to its peers. Currently, the stock is trading at 5.45X forward 12-month sales, above both its three-year median of 3.97X and the industry average of 5.34X. This premium suggests limited near-term upside potential. AFRM currently carries a Value Score of F.

Meanwhile, PayPal and Visa stocks are currently trading at 1.94X and 13.81X forward P/S.

How to Play Affirm Stock Now?

Affirm is accelerating its global expansion, moving beyond the U.S. and Canada markets through new partnerships and market entries across Europe and Australia. Its alliance with Shopify opens doors to major Western European markets, while a relaunch in Australia revives earlier ambitions. At the same time, collaborations with Apple Pay and Google are expanding its reach in both physical and digital ecosystems, positioning Affirm at the center of evolving payment behaviors.

The company is diversifying fast, tapping into the gaming market through its partnerships with Xsolla and Fanatics, and developing new offerings such as debit-based and business-to-business payment solutions. This strategic move reflects its goal of building a more comprehensive financial network that extends well past its core BNPL operations.

Affirm’s biggest strength remains its loyal customer base, driven by transparent pricing and seamless merchant integration. Its focus on smaller, frequent purchases supports more stable cash flows and reinforces user engagement. However, the company’s high leverage presents risk, particularly in an intensely competitive BNPL market crowded with fintech and traditional players alike. A premium valuation suggests that investors may be better served waiting for a more attractive entry point, with upcoming earnings likely to provide clearer signals.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research