Take off with Affirm Holdings Inc. (AFRM): Get ready for trading

Affirm Holdings Inc. (NASDAQ: AFRM) stock jumped 3.18% on Friday to $24.37 against a previous-day closing price of $23.62. With 11.54 million shares changed hands, the volume of the stock remained lighter than its average volume of 14.73 million shares. During the session, the Software – Infrastructure company that operates in wider Technology sector, reached to the highest price of $24.48 whereas the lowest price it dropped to was $23.44. The 52-week range on AFRM shows that it touched its highest point at $25.12 and its lowest point at $8.62 during that stretch. It currently has a 1-year price target of $15.81. Beta for the stock currently stands at 3.05.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of AFRM was up-trending over the past week, with a rise of 8.46%, but this was up by 69.59% over a month. Three-month performance surged to 41.03% while six-month performance rose 144.68%. The stock gained 0.16% in the past year, while it has gained 152.02% so far this year. A look at the trailing 12-month EPS for AFRM yields -3.34 with Next year EPS estimates of -2.19. For the next quarter, that number is -0.71. This implies an EPS growth rate of -32.90% for this year and 21.20% for next year.

Float and Shares Shorts:

At present, 299.63 million AFRM shares are outstanding with a float of 227.52 million shares on hand for trading. On Aug 30, 2023, short shares totaled 39.65 million, which was 13.25% higher than short shares on Jul 30, 2023. In addition to Mr. Max Roth Levchin as the firm’s Founder, CEO & Director, Mr. Libor Michalek serves as its Pres & Director.

Institutional Ownership:

Through their ownership of 84.88% of AFRM’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 45.85% of AFRM, in contrast to 33.58% held by mutual funds. Shares owned by individuals account for 13.35%. As the largest shareholder in AFRM with 10.08% of the stake, Morgan Stanley Investment Managem holds 24,164,112 shares worth 24,164,112. A second-largest stockholder of AFRM, Capital Research & Management Co, holds 22,017,350 shares, controlling over 9.19% of the firm’s shares. Baillie Gifford & Co. is the third largest shareholder in AFRM, holding 19,409,369 shares or 8.10% stake. With a 8.82% stake in AFRM, the American Funds Growth Fund of Ame is the largest stakeholder. A total of 21,130,001 shares are owned by the mutual fund manager. The American Funds AMCAP Fund, which owns about 3.11% of AFRM stock, is the second-largest Mutual Fund holder. It holds 7,460,304 shares valued at 155.25 million. American Funds Small Cap World Fu holds 3.00% of the stake in AFRM, owning 7,197,586 shares worth 149.78 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2023, AFRM reported revenue of $364.13M and operating income of -$257.81M. The EBITDA in the recently reported quarter was -$167.98M and diluted EPS was -$0.65.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for AFRM since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With AFRM analysts setting a high price target of $25.00 and a low target of $6.00, the average target price over the next 12 months is $16.21. Based on these targets, AFRM could surge 2.59% to reach the target high and fall by -75.38% to reach the target low. Reaching the average price target will result in a decline of -33.48% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded AFRM stock several times over the past three months with 11 Buys and 9 Sells. In these transactions, 80,708 shares were bought while 224,115 shares were sold. The number of buy transactions has increased to 53 while that of sell transactions has risen to 46 over the past year. The total number of shares bought during that period was 364,485 while 293,532 shares were sold.

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