Affirm online lender shares rose by 36% on the background of a transaction with Amazon

Fintech Market Newbie Affirm (AFRM), engaged in consumer lending on Friday, reported a partnership with Amazon (AMZN). At the same time, the limited number of Amazon customers will be able to install purchases from $ 50 through the Affirm system.

Shares of fast-growing online lender Affirm (AFRM) rose sharply on Friday after closing trades – by 36% (according to the last check at the time of writing the article).

Affirm announced that its installments will soon be available to Amazon.com (AMZN) customers for purchases from $ 50. First, the service will work in test mode for a limited number of clients, but “in the coming month’s Amazon plans to make Affirm more accessible to its customers,” said a press release.

Affirm calls himself a “new type payment network,” positioning its consumer lending system as more flexible and profitable than traditional credit cards. The competitive advantage of Affirm is that the company never charges a fee for the delay of payment and allows consumers to distribute their purchases for more extended periods with relatively low and transparent interest rates.

While at the time of the closure of trading on Friday, the cost of Affirm shares was $ 67.9 (a decrease of 30% from the first day of trading), the opening price on Monday could be about $ 92 per share. If the price remains at this level, the market capitalization of Affirm can grow from $ 18.55 billion to about $ 23 billion.

Other Partners Affirm Walmart (WMT), Nordstrom (JWN), RealReal (Real), Eddie Bauer, Expedia Group (EXPE), Eventbrite (EB), Bonobos, Purple, and others.

In May, Affirm has published a report for its third fiscal quarter ended March 31. According to the results, Fintech company reported strong growth in all directions:

• Revenue (Revenue) increased to $ 230.7 million, which is 67% more compared to the third quarter of the 2020 fiscal year;

• The number of sellers on the Affirm platform has grown more than double – to almost 12,000;

• The number of active consumers (Active Consumers) increased by 60% compared with last year to 5.4 million.

• Curves Volume (GMV) increased by 83% to $ 2.3 billion.

Thus, the news about the Affirm – Amazon deal can become a significant factor in its growth and shares, which is a positive signal for investors.

The central part of the target price estimates for Affirm shares among Wall Street analysts are significantly higher than the current level; the average rating is about $ 100 per share.

At the same time, Affirm works in a very competitive environment, making it difficult to increase. Among the Fintech companies rapidly grow the number of alternative proposals for consumer lending. Earlier in August, Square (SQ) concluded a deal for $ 29 billion to purchase Australian FINTECH-company Afterpay.

PayPal (PYPL), Klarna, MasterCard (MA) and Fiserv, American Express (AXP), Citi (C), and JP Morgan Chase (JPM) – all offer similar credit services. In addition, according to Bloomberg, Apple (AAPL) plans to start the installment service in partnership with Goldman Sachs (GS).