Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Affirm: Cryptocurrency Adding Appeal to this Stock

Stock MarketsOct 03, 2021 01:30PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Affirm: Cryptocurrency Adding Appeal to this Stock

Financial services company Affirm (AFRM) had a rough day of trading on Tuesday last week. However, it turned that around, at least partially with its premarket performance overnight, and that momentum carried on for a few days. The company rolled out several new features that should prove attractive to current customers. Its embrace of the reasons behind these new features, though, makes me bullish on Affirm overall.

Affirm stock has been a disaster for most of this year, until just recently. It was tracking upward through much of early 2021, and hit a closing high for the year at $139.99 back on February 10. The next day, Affirm stock started a plunge that would last all the way until March 7. That was when it popped back up slightly, plateaued, dropped, plateaued, gained a bit, and then dropped again, where it spent most of May trying to clear $60 per share. The stock stayed in the doldrums until August 27, when a huge spike hit and started the company upward to the point where it's rechallenging February highs. (See Affirm stock charts on TipRanks)

The new features the company added are drawing a lot of attention. First, the company is adding on a debit card option for its account holders. That's a small step but a useful one. Debit cards have proven their value over time, to the point where they're almost table stakes today; anyone offering savings or checking products needs one to keep interest going.

The second new feature may be the biggest surprise. Those who hold savings accounts with the company can now buy and sell cryptocurrency direct from those accounts. This catches Affirm up to companies like PayPal (NASDAQ:PYPL), who have been expanding crypto purchase options direct from accounts. The feature is described as "new and coming soon," so it's not quite clear yet just which of the over 6,500 cryptocurrencies can be bought and sold on Affirm.

Wall Street's Take

Wall Street consensus analysis calls Affirm a “Moderate Buy”. Affirm has held that ranking since February 2021, when that first plunge hit. Of the 11 Wall Street analysts with 12-month price targets on Affirm in the last three months, six of them consider Affirm a “Buy." Four, meanwhile, call it a “Hold” and the remaining one is a “Sell.”

The average Affirm price target occupies a surprisingly broad range. The current average price target is $121.40 per share, with a high of $150 and a low of $65. With Affirm's last price of $117.85, that represents an upside potential of around 3.01%.

Comeback Tour, or Too Little Too Late?

The news is good for Affirm, and Affirm needed some good news after the 2021 it's seen so far. Expanding its product line is a great way to help keep current users in the fold. It helps bring in new ones as well. The sheer number of competitors requires that Affirm take measures to keep its customer base.

Offering access to cryptocurrency purchases is a great step forward, though hopefully, it won't end up like PayPal's. PayPal only, at last report, allows customers to buy one of four cryptos: Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. Great, but with 6,496 or so other coins going completely ignored, the impact of that only goes so far. If Affirm opens up the floodgates and allows access to the broader stock, it may find itself doing brisk business.

A quote from Affirm's CEO Max Levchin, however, suggests that buying in on the latest sub-penny cryptos may be out of reach. “We are doing it in a way that feels natural to us. We will make it really simple, it's safe, we won't let you do crazy things.” “Crazy things,” sadly, will probably include “buying any cryptocurrency that isn't being bought already by institutional investors.”

Worse, this comes at a time when major financial figures are already targeting some of Affirm's current business. Mastercard (NYSE:MA) recently announced that it was getting in on the "Buy Now, Pay Later" (BNPL) movement. That allows just about any retailer to offer easy financing on their products. Mastercard's entry into that space was what generated most of the hit Affirm took in trading yesterday.

Concluding Views

The best news about all this is that Affirm understands the position it's in. At least, it sure seems to. At a time when major financial operations are trying to eat its lunch in BNPL, it's branching out to not only try to eat the majors' lunch with debit cards, but also get a whole new lunch with crypto. That's a positive development by any stretch.

The stock is trading very close to its consensus stock price target. However, the fact that Affirm has such a clear grasp of its own future makes it attractive. It knows the conditions of the market in which it labors, and it can respond to these accordingly. That makes it more likely that the stock will make a play for much higher levels. Getting in on Affirm now may be a good idea. It certainly proved to be a good idea three months ago.

Disclosure: At the time of publication, Steve Anderson did not have a position in any of the securities mentioned in this article.

​Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of Tipranks or its affiliates, and should be considered for informational purposes only. Tipranks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. Tipranks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by Tipranks or its affiliates. Past performance is not indicative of future results, prices or performance.

Affirm: Cryptocurrency Adding Appeal to this Stock
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email