Morgan Stanley Downgrades Affirm Stock, Citing Rally as ‘Overdone’

🌥️Trending News

Morgan Stanley recently downgraded Affirm Holdings ($NASDAQ:AFRM) stock, citing that the recent rally had been excessively done. The downgrade came as a surprise for many investors, causing the stock price to dip in response. Affirm Holdings is a financial services company focused on providing consumer-friendly digital payment options and services. The company offers a variety of services, including consumer financing, installment loans, and credit cards.

Since its initial public offering (IPO) earlier this year, the company’s stock has experienced a significant rally, which Morgan Stanley believes to be excessive. As a result, the financial services giant has downgraded the stock, causing a dip in the stock price.

Stock Price

AFFIRM HOLDINGS stock opened at $40.9 and closed at $43.7, down by 0.6% from prior closing price of 44.0. This is the second consecutive day the stock has declined since its meteoric rise last week. Analysts have noted that despite the company’s impressive fundamentals and strong financial performance, the stock may be overvalued given current market conditions. This decision by Morgan Stanley could be further evidence that the rally for AFFIRM HOLDINGS is coming to an end. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Affirm Holdings. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Affirm Holdings. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Affirm Holdings. More…

Key Ratios Snapshot

Some of the financial key ratios for Affirm Holdings are shown below. More…

Analysis

At GoodWhale, we take a close look at the financials of AFFIRM HOLDINGS to analyze its performance. After running our Star Chart, we conclude that AFFIRM HOLDINGS is classified as a ‘cheetah’ – a type of company that often achieves high revenue or earnings growth, but is considered less stable due to lower profitability. This means that AFFIRM HOLDINGS is attractive to certain types of investors that are looking for higher growth potential despite the inherent risks. However, our health score of 3/10 for AFFIRM HOLDINGS indicates that the company may not be able to sustain future operations in times of crisis due to its weak cashflows and high debt. Moreover, when it comes to other performance metrics such as growth, assets, dividend and profitability, AFFIRM HOLDINGS is strong in growth, medium in assets but weak with regards to dividend and profitability. More…

Peers

In the financial technology industry, there is stiff competition between Affirm Holdings Inc and its competitors: Block Inc, Shopify Inc, Marqeta Inc. All four companies are vying for a share of the market, and each has its own strengths and weaknesses. While Block Inc has a strong presence in the online payments space, Shopify Inc is a leader in e-commerce platforms. Marqeta Inc, on the other hand, specializes in credit card processing.

– Block Inc ($NYSE:SQ)

Block Inc has a market cap of 33.04B as of 2022, a Return on Equity of -1.6%. The company is involved in the development of blockchain technology. Its products include a blockchain platform that enables businesses to develop and deploy decentralized applications. The company also offers a digital asset exchange and a wallet service.

– Shopify Inc ($TSX:SHOP)

Shopify Inc is a Canadian multinational e-commerce company headquartered in Ottawa, Ontario. It is also the name of its proprietary e-commerce platform for online stores and retail point-of-sale systems. Shopify offers online retailers a suite of services “including payments, marketing, shipping and customer engagement tools to simplify the process of running an online store for small merchants.

– Marqeta Inc ($NASDAQ:MQ)

Marqeta Inc is a publicly traded company that provides a platform for modern payment solutions. The company has a market capitalization of 4.11 billion as of 2022 and a return on equity of -11.57%. Marqeta Inc’s products and services include credit and debit cards, prepaid cards, and merchant processing. The company was founded in 2002 and is headquartered in Oakland, California.

Summary

Affirm Holdings, Inc., a financial services company, has recently seen its stock dip after Morgan Stanley downgraded the stock. Morgan Stanley analysts believe that the recent rally in Affirm stock prices is overdone. Investors should watch the company’s upcoming quarterly earnings report and any other news regarding the company for further indications on the future of Affirm Holdings, Inc.’s stock performance. Additionally, investors should perform their own analysis and research to make prudent decisions when investing in Affirm Holdings, Inc.