Latest news with #Affirm
CNET
4 hours ago
- Business
- CNET
Your BNPL Plans Could Soon Impact Your Credit Score. Here's When
CNET/Getty Images Have you ever opted for Buy Now, Pay Later at the checkout? You'd hardly be the only one. About 86.5 million people used BNPL in 2024, according to Capital One's research. Starting later this year, your BNPL plans could start appearing on your credit report. You can use BNPL for just about everything now, from Costco purchases to DoorDash (although that doesn't mean you should). But the one thing BNPL couldn't do was improve your credit. Although some of Affirm's plans do report to Experian and TransUnion, most BNPL services don't report on-time payments to credit bureaus. However, that's set to change. FICO, one of the two major credit scoring models, this week unveiled its FICO® Score 10 BNPL and FICO® Score 10 T BNPL scoring models, which will now take BNPL plans into consideration when creating credit scores. The new scoring models are slated for release in the fall. "Our clients tell us that FICO's initiative to include BNPL data in credit scoring is a progressive step that acknowledges the evolving landscape of consumer financing," Julie May, vice president and general manager of B2B Scores at FICO said in a June 23 statement. Why has it taken so long for BNPL plans to hit your credit report? Because BNPL plans are technically loans, but work similarly to revolving accounts, they've been difficult to quantify. They're easier to qualify for, stack and pay off, so they pose issues with existing scoring models when determining account age and credit use. Here's how the new models are tackling these short-term loans and how it could boost or hurt your credit score. How FICO will score BNPL plans When BNPL plans hit your credit report, you'll receive two scores: one based on the existing FICO model and one taking the new BNPL calculations into account. This provides more information for lenders to consider when evaluating borrowers, without really impacting the older models. However, whether these new scoring models help people or hinder them remains to be seen. According to John Ulzheimer, a credit expert formerly of FICO, Equifax and and founder of FICO's existing scores would have counted each new BNPL as a fresh account. Because BNPL plans typically only span a couple of months, this could drag down your average account age, a factor that accounts for 15% of your credit score. "So, you could harm your score by having too many newly opened accounts, which lowers your average age of accounts," he said. But with these new credit scores, Ulzheimer said FICO has found a way not to consider each new BNPL as its own loan, which should minimize harm. Even if you stack multiple BNPL accounts, as long as you make your required payments, you shouldn't see a drop in credit score. "Installment debt is almost benign to scores, as long as it's being paid on time. So I wouldn't worry about loan amounts, especially for BNPL, which tend to be very low," Ulzheimer added. How long until we see an impact? These new scores will be released in the fall but it will likely be even longer before we see wide adoption. "It takes years for new scoring models to gain traction so I would not expect to see mass adoption by lenders out of the gate," Ulzheimer said. "That would be historically atypical. And, of course, only lenders that care about how BNPL loans are handled in FICO scores would be interested in these new models." Does this change how you should use BNPL plans? Not really, unless you're stacking too much debt and not able to make your payments on time. Like most loans and other credit products, the most important thing is to be able to responsibly manage your debt -- that means not spending money you aren't able to pay back in time. As long as you're doing that, the new scoring models shouldn't negatively impact your finances.
Yahoo
20 hours ago
- Business
- Yahoo
Looking for Fintech Growth? Here's How Affirm and SoFi Stack Up
Affirm Holdings, Inc. AFRM and SoFi Technologies, Inc. SOFI are two standout names in the fast-evolving fintech sector. Both cater to Gen Z and millennial consumers, as well as older consumers, through technology-driven financial solutions that blend lending, digital banking and personal finance. While Affirm primarily focuses on point-of-sale financing through its buy now, pay later ('BNPL') model, SoFi operates a broader platform, encompassing lending, investing, banking and tech infrastructure. With digital financial services becoming more competitive and investors seeking scalable profitability, it is the perfect time to examine these two disruptive players side by side. Let us take a closer look at their fundamentals, execution strategies, and market positioning to see which one currently holds stronger growth potential. Affirm is witnessing rapid growth. In its third-quarter fiscal 2025 results, the company posted $783.1 million in revenues, up 36% year over year, and recorded an adjusted EPS of a penny, beating the Zacks Consensus Estimate by a wide margin. Affirm had long operated at a loss, but since the second quarter of fiscal 2025, it has demonstrated that scale and disciplined growth can translate into bottom-line results. Management also raised full-year guidance; revenues are now anticipated to be in the range of $3.163-$3.193 billion, higher than the prior outlook of $3.13-$3.19 billion. Affirm Holdings, Inc. price-consensus-eps-surprise-chart | Affirm Holdings, Inc. Quote Affirm's success is rooted in its expanding merchant partnerships, ranging from Shopify and Apple Pay to Amazon and FIS, and its growing international presence, including Canada, the U.K. and Western Europe. The company's technology platform, which seamlessly integrates into e-commerce checkouts, is helping Affirm capture greater market share in the increasingly competitive BNPL space. Its adjusted operating margin for fiscal 2025 is expected to be 23-23.6%. Affirm's focus on unit economics, expanding partnerships, and disciplined cost structure makes it an increasingly attractive fintech growth story. The company is delivering on what investors want to see in 2025: profitable growth. Affirm is increasingly leveraging AI to boost employee productivity, including the use of a large language model-powered chatbot that manages a high volume of daily customer interactions with speed and accuracy. The company also plans to launch advanced tools aimed at helping merchants optimize customer acquisition, creating value on both sides of the transaction. With a strong track record in risk management, Affirm continues to expand its long-term funding relationships to support rising loan originations. It has already completed 24 asset-backed securitizations totaling $12.25 billion, backed by more than 150 diverse capital partners, underscoring the depth and resilience of its funding network. SoFi Technologies, too, has had an impressive run. In first-quarter 2025, it delivered record revenue of $770.7 million, growing 33% from a year ago, with net income jumping more than 200% to $71.5 million. Membership growth remains strong, with the platform adding more than 800,000 new users in the quarter, bringing the total to a whopping 10.9 million. SoFi's multi-pronged model, which spans banking, lending, investing, and even fintech infrastructure (through Galileo), has created a diversified business capable of capturing value across multiple verticals. SoFi Technologies, Inc. price-consensus-eps-surprise-chart | SoFi Technologies, Inc. Quote In addition, SoFi's adjusted EBITDA rose to $210.3 million in the first quarter, reflecting a healthy 27% margin, and the company raised guidance for the full year. Its expanding suite of products and cross-selling ability positions SoFi as a well-rounded player in the digital finance space. However, the company's broad scope also introduces greater complexity. Executing across so many business lines simultaneously requires exceptional coordination. SoFi's heavy reliance on unsecured personal loans, which make up nearly 70% of its lending portfolio, raises concerns about the sustainability of its growth in the face of potential economic stress. This concentration exposes the company to elevated credit risk, especially given that the borrower-level delinquency rate for unsecured personal loans was 3.49% in the first quarter of 2025, per reports. SoFi's liquidity appears strained, with $27.9 billion in current liabilities, just $2.7 billion in cash as of March 31, 2025, and a current ratio of 0.8, which is below the industry average. This suggests limited flexibility to meet near-term obligations. In contrast, Affirm's robust current ratio of 11.5 highlights significantly stronger short-term financial health. Zacks estimates show Affirm on a sharp upward trajectory. The Zacks Consensus Estimate for AFRM's fiscal 2025 sales and EPS implies a year-over-year improvement of 37% and 101.8%, respectively. The EPS estimates have been trending northward over the past 60 days. (See the Zacks Earnings Calendar to stay ahead of market-making news.) Image Source: Zacks Investment Research In contrast, SoFi is also expected to grow earnings, but the momentum is with AFRM. The consensus estimate for SoFi's 2025 sales and EPS implies a year-over-year rise of 26.2% and 80%, respectively. The EPS estimates have been trending northward over the past 60 days. Image Source: Zacks Investment Research Over the year-to-date period, AFRM shares gained 9.8% while SOFI witnessed an 8.9% growth. During this time, the S&P 500 Index grew 2.9%. Affirm also shows stronger short-term momentum, with a 1-month gain of 32% compared to SoFi's 25.9%. Overall, Affirm's superior performance so far this year, driven by better earnings visibility and market sentiment, gives it a modest edge over SoFi. Image Source: Zacks Investment Research AFRM is currently trading at 5.49X forward 12-month P/S, higher than SOFI's 5.15X. Although SoFi appears cheaper, it is important to consider context: Affirm is rapidly scaling and has entered profitability, giving investors confidence in its underlying economics and growth potential. SoFi, by comparison, has a broader but more complex business model, one that the market is valuing relatively conservatively, perhaps reflecting its operational diversification and execution risks. Image Source: Zacks Investment Research Both Affirm and SoFi are standout fintech innovators with strong growth narratives, but Affirm currently has more room to run. It is 18.9% below its 52-week high of $82.53, while SOFI is 9% away from its 52-week high of $18.42. AFRM has demonstrated a decisive pivot to profitability, posted robust revenue growth, and continues to expand its merchant ecosystem with disciplined execution. Its AI integration, risk-managed lending and deep capital partner network support its long-term scalability. In contrast, SoFi's broad platform comes with greater complexity and credit concentration risk, especially in unsecured personal loans. Liquidity pressures and a lower current ratio add further caution. With stronger earnings momentum, better short-term liquidity, and a focused business model gaining traction, Affirm stands out as the fintech stock with more attractive upside potential, even though the companies currently carry a Zacks Rank #3 (Hold) each. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 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 Affirm Holdings, Inc. (AFRM) : Free Stock Analysis Report SoFi Technologies, Inc. (SOFI) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20 hours ago
- Business
- Yahoo
Can Xsolla Help Affirm Gain an Edge in Gaming Payments?
Affirm Holdings, Inc. AFRM, the leading buy now, pay later (BNPL) solution provider, has entered a new partnership with Xsolla, a prominent gaming company, renowned for driving innovation and shaping the future of video game commerce. This deal unlocks access to Affirm's transparent and flexible payment solutions for game developers, using Xsolla's platform in the United States. With Affirm built directly into the checkout experience, players can divide their purchases ($50 or more) into biweekly payments at no interest or choose extended monthly plans based on their needs. This gives gamers the freedom to access premium content more affordably. Whether purchasing full games or in-game content, players can choose Affirm at checkout, complete a brief eligibility check, and, once approved, select a customized payment plan. They plan to expand in Canada and the U.K. soon. Teaming up with Xsolla will help AFRM to expand its footprint in the growing gaming industry, targeting a tech-savvy audience that prefers convenient and adaptable payment options. By embedding its flexible payment solutions into Xsolla's platform, Affirm can boost transaction volumes through frequent in-game and full-game purchases, while also diversifying beyond its traditional retail and travel partners. This partnership is likely to strengthen Affirm's financial position by unlocking new revenue streams. With players making regular purchases, Affirm can benefit from increased transaction volume, driving up gross merchandise value. By joining Xsolla's large network of game developers and publishers, Affirm can reach more merchants and enhance its brand visibility, which will help it to stay competitive in the growing digital market. PayPal Holdings, Inc. PYPL is a major name in the BNPL space. It recently partnered with Selfbook to streamline hotel payments. The integration offers travelers a seamless way to pay using PayPal while unlocking special rates, making bookings more affordable. This move adds value for users and boosts booking performance for hotels, helping PayPal strengthen its position. Meanwhile, Block, Inc. XYZ is keeping pace in the industry by integrating Afterpay directly into its Cash App debit card, allowing eligible users to split qualifying purchases into biweekly instalments. This move helps Block expand BNPL access into everyday spending, embedding flexible payments right at the point of sale. Over the past year, AFRM shares have gained 9.8% underperforming the industry and outperforming the Zacks S&P 500 Composite. Image Source: Zacks Investment Research From a valuation standpoint, Affirm trades at a forward price-to-sales ratio of 5.49, down from the industry average. AFRM carries a Value Score of F. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Affirm's fiscal 2025 earnings implies a 101.8% improvement year over year, followed by massive growth next year. Image Source: Zacks Investment Research The stock currently carries a Zacks Rank #3 (Hold).You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 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 PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report Affirm Holdings, Inc. (AFRM) : Free Stock Analysis Report Block, Inc. (XYZ) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
21 hours ago
- Business
- Globe and Mail
Can Xsolla Help Affirm Gain an Edge in Gaming Payments?
Affirm Holdings, Inc. AFRM, the leading buy now, pay later (BNPL) solution provider, has entered a new partnership with Xsolla, a prominent gaming company, renowned for driving innovation and shaping the future of video game commerce. This deal unlocks access to Affirm's transparent and flexible payment solutions for game developers, using Xsolla's platform in the United States. With Affirm built directly into the checkout experience, players can divide their purchases ($50 or more) into biweekly payments at no interest or choose extended monthly plans based on their needs. This gives gamers the freedom to access premium content more affordably. Whether purchasing full games or in-game content, players can choose Affirm at checkout, complete a brief eligibility check, and, once approved, select a customized payment plan. They plan to expand in Canada and the U.K. soon. Teaming up with Xsolla will help AFRM to expand its footprint in the growing gaming industry, targeting a tech-savvy audience that prefers convenient and adaptable payment options. By embedding its flexible payment solutions into Xsolla's platform, Affirm can boost transaction volumes through frequent in-game and full-game purchases, while also diversifying beyond its traditional retail and travel partners. This partnership is likely to strengthen Affirm's financial position by unlocking new revenue streams. With players making regular purchases, Affirm can benefit from increased transaction volume, driving up gross merchandise value. By joining Xsolla's large network of game developers and publishers, Affirm can reach more merchants and enhance its brand visibility, which will help it to stay competitive in the growing digital market. How PayPal and Block Expanding in the BNPL Space? PayPal Holdings, Inc. PYPL is a major name in the BNPL space. It recently partnered with Selfbook to streamline hotel payments. The integration offers travelers a seamless way to pay using PayPal while unlocking special rates, making bookings more affordable. This move adds value for users and boosts booking performance for hotels, helping PayPal strengthen its position. Meanwhile, Block, Inc. XYZ is keeping pace in the industry by integrating Afterpay directly into its Cash App debit card, allowing eligible users to split qualifying purchases into biweekly instalments. This move helps Block expand BNPL access into everyday spending, embedding flexible payments right at the point of sale. Affirm's Price Performance, Valuation and Estimates Over the past year, AFRM shares have gained 9.8% underperforming the industry and outperforming the Zacks S&P 500 Composite. From a valuation standpoint, Affirm trades at a forward price-to-sales ratio of 5.49, down from the industry average. AFRM carries a Value Score of F. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Affirm's fiscal 2025 earnings implies a 101.8% improvement year over year, followed by massive growth next year. The stock currently carries a Zacks Rank #3 (Hold).You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks' Research Chief Picks Stock Most Likely to "At Least Double" Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren't winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%. See Our Top Stock to Double (Plus 4 Runners Up) >> 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 PayPal Holdings, Inc. (PYPL): Free Stock Analysis Report Affirm Holdings, Inc. (AFRM): Free Stock Analysis Report Block, Inc. (XYZ): Free Stock Analysis Report
Globe and Mail
a day ago
- Business
- Globe and Mail
Looking for Fintech Growth? Here's How Affirm and SoFi Stack Up
Affirm Holdings, Inc. AFRM and SoFi Technologies, Inc. SOFI are two standout names in the fast-evolving fintech sector. Both cater to Gen Z and millennial consumers, as well as older consumers, through technology-driven financial solutions that blend lending, digital banking and personal finance. While Affirm primarily focuses on point-of-sale financing through its buy now, pay later ('BNPL') model, SoFi operates a broader platform, encompassing lending, investing, banking and tech infrastructure. With digital financial services becoming more competitive and investors seeking scalable profitability, it is the perfect time to examine these two disruptive players side by side. Let us take a closer look at their fundamentals, execution strategies, and market positioning to see which one currently holds stronger growth potential. The Case for Affirm Affirm is witnessing rapid growth. In its third-quarter fiscal 2025 results, the company posted $783.1 million in revenues, up 36% year over year, and recorded an adjusted EPS of a penny, beating the Zacks Consensus Estimate by a wide margin. Affirm had long operated at a loss, but since the second quarter of fiscal 2025, it has demonstrated that scale and disciplined growth can translate into bottom-line results. Management also raised full-year guidance; revenues are now anticipated to be in the range of $3.163-$3.193 billion, higher than the prior outlook of $3.13-$3.19 billion. Affirm's success is rooted in its expanding merchant partnerships, ranging from Shopify and Apple Pay to Amazon and FIS, and its growing international presence, including Canada, the U.K. and Western Europe. The company's technology platform, which seamlessly integrates into e-commerce checkouts, is helping Affirm capture greater market share in the increasingly competitive BNPL space. Its adjusted operating margin for fiscal 2025 is expected to be 23-23.6%. Affirm's focus on unit economics, expanding partnerships, and disciplined cost structure makes it an increasingly attractive fintech growth story. The company is delivering on what investors want to see in 2025: profitable growth. Affirm is increasingly leveraging AI to boost employee productivity, including the use of a large language model-powered chatbot that manages a high volume of daily customer interactions with speed and accuracy. The company also plans to launch advanced tools aimed at helping merchants optimize customer acquisition, creating value on both sides of the transaction. With a strong track record in risk management, Affirm continues to expand its long-term funding relationships to support rising loan originations. It has already completed 24 asset-backed securitizations totaling $12.25 billion, backed by more than 150 diverse capital partners, underscoring the depth and resilience of its funding network. The Case for SoFi SoFi Technologies, too, has had an impressive run. In first-quarter 2025, it delivered record revenue of $770.7 million, growing 33% from a year ago, with net income jumping more than 200% to $71.5 million. Membership growth remains strong, with the platform adding more than 800,000 new users in the quarter, bringing the total to a whopping 10.9 million. SoFi's multi-pronged model, which spans banking, lending, investing, and even fintech infrastructure (through Galileo), has created a diversified business capable of capturing value across multiple verticals. In addition, SoFi's adjusted EBITDA rose to $210.3 million in the first quarter, reflecting a healthy 27% margin, and the company raised guidance for the full year. Its expanding suite of products and cross-selling ability positions SoFi as a well-rounded player in the digital finance space. However, the company's broad scope also introduces greater complexity. Executing across so many business lines simultaneously requires exceptional coordination. SoFi's heavy reliance on unsecured personal loans, which make up nearly 70% of its lending portfolio, raises concerns about the sustainability of its growth in the face of potential economic stress. This concentration exposes the company to elevated credit risk, especially given that the borrower-level delinquency rate for unsecured personal loans was 3.49% in the first quarter of 2025, per reports. SoFi's liquidity appears strained, with $27.9 billion in current liabilities, just $2.7 billion in cash as of March 31, 2025, and a current ratio of 0.8, which is below the industry average. This suggests limited flexibility to meet near-term obligations. In contrast, Affirm's robust current ratio of 11.5 highlights significantly stronger short-term financial health. How Do Zacks Estimates Compare for AFRM & SOFI? Zacks estimates show Affirm on a sharp upward trajectory. The Zacks Consensus Estimate for AFRM's fiscal 2025 sales and EPS implies a year-over-year improvement of 37% and 101.8%, respectively. The EPS estimates have been trending northward over the past 60 days. (See the Zacks Earnings Calendar to stay ahead of market-making news.) Image Source: Zacks Investment Research In contrast, SoFi is also expected to grow earnings, but the momentum is with AFRM. The consensus estimate for SoFi's 2025 sales and EPS implies a year-over-year rise of 26.2% and 80%, respectively. The EPS estimates have been trending northward over the past 60 days. Image Source: Zacks Investment Research Price Performance Comparison Over the year-to-date period, AFRM shares gained 9.8% while SOFI witnessed an 8.9% growth. During this time, the S&P 500 Index grew 2.9%. Affirm also shows stronger short-term momentum, with a 1-month gain of 32% compared to SoFi's 25.9%. Overall, Affirm's superior performance so far this year, driven by better earnings visibility and market sentiment, gives it a modest edge over SoFi. Price Performance – AFRM, SOFI & S&P 500 Valuation: AFRM vs. SOFI AFRM is currently trading at 5.49X forward 12-month P/S, higher than SOFI's 5.15X. Although SoFi appears cheaper, it is important to consider context: Affirm is rapidly scaling and has entered profitability, giving investors confidence in its underlying economics and growth potential. SoFi, by comparison, has a broader but more complex business model, one that the market is valuing relatively conservatively, perhaps reflecting its operational diversification and execution risks. Last Words Both Affirm and SoFi are standout fintech innovators with strong growth narratives, but Affirm currently has more room to run. It is 18.9% below its 52-week high of $82.53, while SOFI is 9% away from its 52-week high of $18.42. AFRM has demonstrated a decisive pivot to profitability, posted robust revenue growth, and continues to expand its merchant ecosystem with disciplined execution. Its AI integration, risk-managed lending and deep capital partner network support its long-term scalability. In contrast, SoFi's broad platform comes with greater complexity and credit concentration risk, especially in unsecured personal loans. Liquidity pressures and a lower current ratio add further caution. With stronger earnings momentum, better short-term liquidity, and a focused business model gaining traction, Affirm stands out as the fintech stock with more attractive upside potential, even though the companies currently carry a Zacks Rank #3 (Hold) each. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks' Research Chief Picks Stock Most Likely to "At Least Double" Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren't winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%. See Our Top Stock to Double (Plus 4 Runners Up) >> Affirm Holdings, Inc. (AFRM): Free Stock Analysis Report
