Is Affirm Holdings, Inc. (AFRM) Among the Best Digital Payments Stocks to Buy According to Analysts?

We recently published a list of 11 Best Digital Payments Stocks to Buy According to Analysts. In this article, we are going to take a look at where Affirm Holdings, Inc. (NASDAQ:AFRM) stands against other best digital payment stocks.

Digital payment stocks are companies that specialize in designing, developing, or administering digital payment solutions. These firms use technology to enable electronic transactions between individuals, businesses, and institutions. Businesses that provide services such as online payment gateways, mobile payment apps, and peer-to-peer payment platforms can all be considered digital payment stocks. These technologies include digital wallets, payment processing systems, and blockchain-based payment solutions.

The global digital payment market is booming. According to Grand View Research’s report, the global digital payment market is anticipated to reach $96.07 billion in 2023, with a compound annual growth rate (CAGR) of 21.1% between 2024 and 2030. In terms of solution insights, payment processing led the market with 26.18% of worldwide revenue in 2023. North America dominated the market, accounting for 33.9% of total revenue in 2023. Europe is projected to see a substantial CAGR between 2024 and 2030.

Meanwhile, according to Marqueta’s 2024 State of Payments Report, 46% of survey respondents in the USA reported using some type of contactless payment during the last seven days. This is in contrast with 80% in the United Kingdom and 69% in Australia. Emerging technologies such as cryptocurrencies and the metaverse aim to drive payment innovation and borderless payment choices for customers.

As per McKinskey‘s survey, in 2024, around 90% of consumers in both the US and Europe said they made at least one digital payment in the past year, with usage in the US hitting a record 92%. The survey defines digital payments as transactions completed online—through websites or apps—or in physical stores using dedicated apps like digital wallets. In-app and in-store payments contributed to this expansion, with digital wallet usage for in-store transactions rising from 19% in 2019 to 28% in 2024. This expansion reveals a $10 trillion annual market for both regions. Notably, 20% of digital wallet users in the country occasionally leave home without their traditional wallets, underlining the trend toward digital-first transactions.

There is also a difference in customer preferences between the US and Europe. European users prefer to choose local solutions like iDEAL in the Netherlands or Swish in Sweden, whereas US consumers prefer retailer apps. In America, younger consumers are especially attracted to “Buy Now, Pay Later” marketplaces, spending 1.5 to 2 times more than those who start on merchant websites. Rewards and offers are increasingly influencing payment decisions, with 25% of U.S. consumers citing rewards as a significant factor. This shows the increasing importance of digital wallets in everyday transactions. It opens up chances for payment providers to improve omnichannel loyalty programs and extend retail platforms. Furthermore, A2A payment formats may expand, particularly in the United States, where regulatory improvements could lower merchant costs.

Looking forward, Deloitte’s 2025 payment industry insights outlook revealed that consumers are turning to digital payments, with check transactions dropping as large stores adopt a “check zero” strategy to reduce costs and fraud concerns. Global e-commerce sales are expected to reach $6.3 trillion by 2024, fueling the growing use of credit cards, debit cards, and peer-to-peer payments. P2P app usage has gone up by 12% since 2021, but cash and check P2P payments have dropped. Digital payments are becoming more popular in B2B due to cost savings and technological developments, but checks continue to play an important role.

Our Methodology

For this article, we first screened for companies that have operations in digital payments. Then, we identified stocks with positive analyst coverage and upside potential. Finally, from that group, we selected the 11 stocks that had the highest upside potential as of April 9, 2025. We have only included stocks in our list with an upside potential of 35% or higher. The stocks are ranked in ascending order of the upside potential.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Affirm Holdings, Inc. (NASDAQ:AFRM)

Analysts’ Upside Potential as of April 9: 85.10%

Affirm Holdings, Inc. (NASDAQ:AFRM) provides a platform for digital and mobile-first commerce. It includes a consumer-facing point-of-sale payment solution, merchant commerce tools, and a consumer-focused app. The company produces revenue through merchant networks, virtual card networks, and other channels. Geographically, it generates more than half of its revenue from the United States. The business offers buy now, pay later services. As a prominent BNPL lender in the United States, it provides diverse lending alternatives. The company’s Affirm Card debit card offering also allows customers to pay in advance for certain transactions. The stock surged by more than 4% in the past year, making it among the Best Digital Money Stocks.

Affirm Holdings, Inc. (NASDAQ:AFRM) expanded globally in late 2024, beginning in the United Kingdom in November as its first market outside of the United States and Canada. The business went live in thousands of stores in October after partnering with Metro by T-Mobile and GoodRx to finance certain prescriptions. The business also collaborated with Sweetwater to strengthen its footprint in e-commerce and telesales. Active merchants climbed 21% to 337,000 as of December 31, 2024, while active customers surged 23% YoY to 21 million.

Goldman Sachs analyst Will Nance boosted Affirm Holdings, Inc. (NASDAQ:AFRM)’s price objective to $56 from $50 and maintained a Buy rating on the stock after the company filed an 8K filing stating that Walmart accounted for 5% of its gross merchandise volume and 2% of operational profits. In terms of incremental thoughts on the announcement, given the new facts, the firm believes the financial impact on the firm will be significantly less. According to Goldman, this is a result of Walmart’s past dealings with third-party credit providers. In general, it is believed that the low profitability of this portfolio reflects the challenges of underwriting Walmart’s lower-end clientele and the comparatively lower level of profitability that Walmart probably bargains with its suppliers.

Overall, AFRM ranks 2nd among the 11 Best Digital Payments Stocks to Buy According to Analysts. While we acknowledge the potential of digital payment companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AFRM but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.”

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Disclosure: None. This article is originally published at Insider Monkey.