Be Cautious With Affirm in a Rising-Rate Environment
The buy-now-pay-later (BNPL) company Affirm (NASDAQ: AFRM) recently reported strong quarterly results, in which the company beat analyst estimates on earnings and revenue for the quarter ending March 31. Founder and CEO Max Levchin also said on the earnings call that the company's plan is to achieve "a sustained profitability run rate" on an adjusted basis by the end of the fiscal year 2023. The news sent the stock surging last week ,b ut while Affirm looks to be in solid shape, here's why investors should still be cautious right now.
BNPL is the business of allowing consumers to purchase items with no money up front and then pay it off over several installments. Affirm has created innovative technology to allow merchants to offer numerous BNPL options. The company has formed several big partnerships with Amazon, Walmart, and Shopify, which have allowed it to significantly grow gross merchandise volume across its platform.
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Source Fool.com
