What Happened?
Shares of buy now, pay later company Affirm (NASDAQ: AFRM) jumped 5.3% in the afternoon session after the company reported second-quarter 2026 financial results, beating Wall Street's revenue and earnings expectations. According to a company press release, Affirm generated revenue of $1.17 billion, up 33% year over year, and delivered GAAP profit of $4.62 per share alongside pre-tax profit of $169.1 million. Both figures came in well ahead of Wall Street expectations, with revenue topping analyst estimates of $1.11 billion and EPS significantly surpassing consensus forecasts of $0.35.
The company's pre-tax profit margin expanded to 14.5%, up 6.3 percentage points from the prior year. Looking ahead, Affirm projected third-quarter 2026 revenue of $1.21 billion at the midpoint, representing a 29.1% increase year over year. That guidance also came in above analyst estimates of $1.16 billion, bolstering investor confidence in the company's growth trajectory.
After the initial pop, the shares cooled down to $81.27, up 3.4% from the previous close.
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What Is The Market Telling Us
Affirm’s shares are extremely volatile and have had 44 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 15 days ago when the stock gained 6.9% on the news that BMO Capital Markets raised its price target on the stock, coupled with growing excitement for its upcoming earnings report and news of large banks increasing their holdings.
BMO Capital Markets lifted its price target on Affirm to $86.00 ahead of the company's fourth-quarter fiscal 2026 earnings report, scheduled for August 27. Confidence in the stock was also reinforced by regulatory filings showing major institutions like Bank of America and Royal Bank of Canada had recently increased their stakes. This accumulation by large investors signals rising conviction in the company's prospects.
Affirm is up 9.8% since the beginning of the year, but at $81.27 per share, it is still trading 11.8% below its 52-week high of $92.18 from September 2025. Despite the year-to-date gain, investors who bought $1,000 worth of Affirm’s shares 5 years ago would now be looking at only $816.02.
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