The stock is still down 63% in 2022
Affirm Holdings, Inc. (NASDAQ: AFRM) is an American financial technology company that operates as a financial lender of installment loans for consumers to use at the point of sale to finance purchases.
The company is gearing up for its fourth-quarter earnings report, which will take place after the close on Thursday, Aug. 25. Affirm has missed earnings expectations on three of its last four earnings reports, only beating expectations in the latest quarterly report.
Drilling down, the stock has a history of outsized post-earnings moves. During its past six reports, AFRM staged a next-day pop of more than 30% two times, and a 20.7% plummet after its February report this year. half of these post-earnings moves were positive, and the stock averaged an 18.8% swing over this time period, regardless of direction.
It's been a slippery slope for the equity, which has yet to recover from its pullback off early November highs near the $176 level. AFRM is down 63.2% year-to-date, and it looks like it's struggling with dual pressure at its 160-day moving average and the $40 mark.
However, the shares have managed to add over 175% since hitting a record low of $13.64 in mid-May, resulting in a rich price-sales ratio of 8.15. In addition, the fintech company maintains $2.26 billion in cash and $4.16 billion in total debt on its balance sheet. Still, Affirm stock remains an intriguing long-term play for growth investors.
The business has produced 371.7% annual revenue growth since fiscal 2019, having already increased its trailing 12-month revenues 43.2% since fiscal 2021. Furthermore, Affirm is estimated to grow revenues 53.8% for fiscal 2022 and 42.6% for fiscal 2023, with estimates also indicating an expected reduction in its net losses for both years. Still, AFRM continues to be a high-risk investment due to its rapid bounce back, high valuation, and unprofitability.