Why Investors Were So Affirmative on Affirm Holdings This Week

Buy now, pay later (BNPL) company Affirm Holdings (NASDAQ: AFRM) was a hot item on the stock exchange over the past few days. According to data compiled by S&P Global Market Intelligence, the company's shares improved by 17% in price week to date as of early Friday morning. A continuing series of analyst price target raises, plus a deal with a large online travel agency (OTA) were the key factors behind the rise.

The power of the pundits

With recent news of an estimates-beating quarter at its back, Affirm has been quite the stock analyst darling this month. In the wake of that fiscal first-quarter earnings release near the start of November, a clutch of pundits got progressively more bullish on the company's future.

The stampede slowed but didn't stop this week. Analysts at both Barclays and Mizuho weighed in with fresh takes on Affirm that featured price target raises.

Mizuho's Dan Dolev pushed his fair value assessment $4 higher to $69 per share and maintained his outperform (i.e., buy) recommendation. Barclays' Ramsey El-Assal changed his to $64 per share from the previous $54, while also keeping his equivalent of a buy tag.

It wasn't exactly difficult to be positive about Affirm. Earlier in the month it posted those first-quarter figures, which beat analyst projections on both the top and bottom lines. On top of that, shortly after this news development Affirm reported that it was partnering with payment card giant Visa on a flexible payments system being rolled out in the U.S.

Booking a high-level partnership in travel

On top of that, as this week kicked off Affirm announced another tie-up with a famous name in an industry. The company is providing its services to travel powerhouse Booking Holdings' Priceline brand. Affirm will supply, yes, BNPL capabilities for customers wanting to divide their spending into installment payments.

It feels as if Affirm has been scooping up some fine opportunities for long-term revenue generation lately. Those recent bursts of optimism are entirely justified, in my view.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Booking Holdings and Visa. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.