Affirm Holdings Inc. shares
AFRM,
were rallying more than 5% in premarket trading Tuesday after an analyst weighed in with positive commentary on the company’s Debit+ debit-card business. Mizuho’s Dan Dolev pointed to “promising” Google search trends for the company’s debit-card product, which lets customers split purchases into installments. “In our view, the uptick in Debit+ searches is reminiscent of the ‘buzz’ that engulfed Square’s Cash Card in its early days,” Dolev wrote. If the Debit+ card follows a similar trajectory to Block Inc.’s
SQ,
Cash Card, it has the potential to raise Affirm’s medium-term compound annual growth rate for gross merchandise volume to a mid-30% figure from a mid-20% one, Dolev reasoned. “Although this may dilute RLTC (revenue less transaction costs) as a % of GMV, the incremental volume & revenue growth benefit should be positive catalysts and help offset potential sales headwinds from the upcoming student loan refinancing,” he wrote. Affirm shares gained more than 8% in Monday’s session, though they declined more than 15% across the three sessions prior to that.
