Affirm Holdings, Inc.

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Сильный индекс, незначительно вырос. Рынок не поддерживает быков.

Strong index, slightly up. The market does not support the bulls.

Слабый индекс, без изменений

Средний индекс, незначительно вырос. Отток средств из лонгов на высоком уровне.

Medium index, slightly up. Outflow of funds from longs at a high level.

Key Points
Wall Street is discussing rate increases as the Federal Reserve seeks to address high inflation.
Donald Trump is still pushing for rate cuts.
Affirm would probably like to see the U.S. President win out.
U.S. President Donald Trump hasn't been shy about what he'd like to see happen with interest rates, openly calling for the Federal Reserve to cut rates. That doesn't seem to be in the cards, given recent comments from Fed chair Kevin Warsh. But Affirm (NASDAQ: AFRM) shareholders shouldn't ignore the political and economic dynamics taking shape. The fintech company likely has a big preference for the direction of rates.
What does Affirm do?
Affirm is a buy-now-pay-later company, but it also has a card business and makes consumer loans. That gives it three potential sources of revenue: payments from retailers for offering zero-interest financing, transaction fees from card usage, and interest from loans. However, the underlying story here is consumer health. Affirm needs people to buy things for its model to work.
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A rate increase might allow the company to charge higher interstate rates, but it could also reduce consumer spending. That's a net negative, with the far bigger risk that too many rate increases too quickly could tip the economy into a recession. A recession would be a terrible outcome for Affirm. Rate increases would also increase Affirm's own cost of capital, crimping margins.
Mostly good news if the President gets his way
A rate cut, on the other hand, would make it easier for people to keep spending and lower the company's cost of capital. Those are big positives and would help the company to continue growing its business. It is actively expanding its retailer network and card business while also broadening its overseas reach. As long as demand for buy-now-pay-later remains robust, it will have an easier time on all fronts.
Lower rates wouldn't be all positive, as the company may have to lower the rates it charges on consumer loans. But that would likely be overshadowed by the increased opportunity for business growth. So, all in, Affirm is likely to support the call for rate cuts over rate increases.
Affirm is still a young business
All of that said, investors should tread with some caution here. Buy-now-pay-later is a relatively new model, and there isn't a material track record of how companies like Affirm will perform during a deep economic downturn. Affirm, for example, only came public in early 2021.
Meanwhile, the stock's price-to-earnings ratio is a lofty 65x. If rates move the way Affirm would like, the business may benefit, but the stock may not benefit as much as investors expect. And if rates move against the company, well, the stock could take a material hit if investor sentiment on the buy-now-pay-later model sours.
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Are Rate Cuts a Bigger Risk or Reward for Affirm?

Sezzle Inc. SEZL is moving beyond its checkout roots. The company is building a wider consumer finance platform designed to keep users engaged more often and across more spending occasions.
That shift matters because a broader product set could raise purchase frequency, deepen wallet share and reduce reliance on new merchant integrations. The opportunity is promising, but execution and credit control remain central to the story.
Sezzle Inc. Price, Consensus and EPS Surprise
Sezzle Expands Beyond Checkout
Sezzle’s core model lets consumers make a down payment and repay purchases through scheduled installments, while the company earns revenues from merchant and partner income, consumer fees and subscriptions. That checkout foundation remains important to its merchant network and user acquisition funnel.
The growth agenda now extends into open-loop and virtual cards, enhanced longer-term lending, Sezzle Mobile and rewards-led engagement. Affirm Holdings AFRM offers a useful industry comparison because it also competes in point-of-sale installment financing, while PayPal Holdings PYPL shows how large payment platforms can embed buy-now-pay-later options into broader checkout ecosystems.
SEZL Builds a Higher-Frequency Model
Sezzle’s first-quarter 2026 metrics show a platform becoming more habitual. Average quarterly purchase frequency rose to 7.1 times from 6.1 times a year earlier, a full additional purchase across the consumer base.
Subscribers increased by 44,000 sequentially to 714,000. That supports a strategy centered on higher-lifetime-value customers and more activity from existing users, rather than relying only on acquiring new shoppers or signing new merchants.
Sezzle Adds Products Not in Guidance
Management’s product roadmap includes cash-flow management tools, checking and deposit accounts, broader card acceptance and other services that can move Sezzle closer to an everyday money platform. These offerings could create more reasons for users to return between checkout moments.
Full-year 2026 guidance does not include projections for products still in development. That leaves room for incremental upside if launches gain traction, although product adoption and timing still need to prove out through the rest of 2026 and into 2027.
Image Source: Zacks Investment Research
SEZL Balances Growth With Credit Discipline
Pay-in-5 is an important part of the engagement push because it adds another short-term installment option and can fit consumer demand for more flexibility. Management has described it as a meaningful driver, but it also increased working-capital needs after its January 2026 launch.
The product carries somewhat higher loss rates by design, so underwriting discipline remains critical. Sezzle continues to target provision for credit losses of 2.5% to 3% of gross merchandise volume, supported by model improvements, new data sources and collection efforts.
Sezzle’s Signals Support the Thesis
The bottom line is that Sezzle’s platform expansion gives the growth story more depth than a narrow checkout-only model. More products, more frequent usage and subscriber-led engagement support a favorable growth-oriented view, provided credit performance and funding needs stay controlled.
SEZL currently carries a Zacks Rank #2 (Buy). It also has a Growth Score of A, Momentum Score of A and VGM Score of A, which align with favorable growth and trading-style characteristics for investors focused on top-ranked stocks. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Value Score of D adds an important balance. Investors are paying a premium for Sezzle’s growth trajectory, so the case depends less on a low entry valuation and more on sustained execution across the broader product roadmap.
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Sezzle's Everyday Money Expansion Could Reshape Its Growth Story Ahead

Sezzle Inc. SEZL is using artificial intelligence, open-loop payments and direct-to-consumer engagement to widen its role in consumer finance.
For investors, the question is whether these tools can support faster product development, lower operating friction and broader consumer usage without weakening credit discipline or execution quality.
Sezzle Inc. Price, Consensus and EPS Surprise
Sezzle Uses AI to Scale Operations
Sezzle has embedded artificial intelligence across customer support, underwriting, chargebacks, software development and business intelligence. The goal is to increase output while keeping expense growth below revenue growth.
Its AI support chatbot is already resolving roughly 60% to 70% of customer chats without escalation. Management also said AI is helping review chargebacks, improve support quality, expand access to company data and speed up engineering workflows.
AI-assisted coding is another part of the efficiency story. With up to around 80% of code AI-generated and then reviewed, Sezzle is using automation to shorten development cycles and support a broader product roadmap.
SEZL Broadens Open-Loop Card Usage
Sezzle’s open-loop and virtual-card strategy extends the platform beyond merchants that are directly integrated at checkout. That matters because broader acceptance can give consumers more ways to use Sezzle in everyday spending.
The company has also introduced a virtual card in Canada with select integrated merchants. Broader card acceptance could reduce reliance on new merchant onboarding over time, while merchants still remain an important source of customer acquisition.
This approach places SEZL in a competitive payments landscape that also includes Affirm Holdings AFRM, which offers pay-over-time options, including longer payment plans. PayPal Holdings PYPL is another relevant comparison because its digital wallet includes buy now, pay later options and broader consumer payment features.
Sezzle Targets Deeper Consumer Engagement
Sezzle’s engagement strategy is built around giving consumers more reasons to return to the platform. Subscription products, rewards and the Earn Tab are central to that model.
Since its June 2025 launch, the Earn Tab has generated 4.8 million visits. Consumers also showed a 55% increase in buy-now-pay-later conversion within 30 days of their first Earn Tab activity.
Those metrics support the idea of a self-reinforcing engagement loop. More visits can lift product discovery, while higher conversion can support repeat usage and stronger direct-to-consumer relationships.
Image Source: Zacks Investment Research
SEZL's Roadmap Extends Into Financial Services
The product roadmap is moving beyond traditional Pay-in-4. Sezzle has added Pay-in-5, enhanced longer-term lending, Sezzle Mobile and broader card-based usage, while also working on cash-flow management tools and checking or deposit accounts.
These offerings could move Sezzle closer to an everyday money platform. A wider set of products may deepen wallet share and create more frequent customer touchpoints than a checkout-only model.
The expansion also adds complexity. Pay-in-5 can support engagement, but it increased working capital in the first quarter of 2026. Regulatory milestones, funding needs and product launch timing remain watch items as Sezzle pushes further into financial services.
Sezzle’s Growth and Momentum Scores Stand Out
Sezzle’s emerging trends support a growth-oriented narrative, but the stock still depends on execution. AI efficiency, open-loop adoption and deeper engagement need to translate into durable earnings growth rather than simply a broader feature set.
SEZL currently carries a Zacks Rank #2 (Buy). The company also has a Growth Score of A, Momentum Score of A and VGM Score of A, which align with a favorable growth and momentum profile over the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Value Score of D keeps the valuation discussion in focus. Investors are paying for Sezzle’s growth trajectory, making the next phase less about the number of new products and more about whether those products can scale profitably.
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How Sezzle's AI and Open-Loop Strategy Could Power Its Next Phase

Mastercard Incorporated MA and Affirm Holdings, Inc. AFRM are key players in the rapidly evolving digital payments industry, where demand for seamless, cashless and flexible payment solutions continues to grow. The expansion of e-commerce, digital wallets and installment-based financing is reshaping how consumers and merchants complete transactions.
While both companies are benefiting from this shift, they approach the market from different angles. Mastercard operates one of the world's largest global card payment networks, whereas Affirm has built its business around buy now, pay later (BNPL) financing and merchant partnerships. Their overlapping exposure to digital payments, combined with distinct business models and growth strategies, makes them compelling companies to compare.
Let’s dive deep and closely compare the fundamentals of the two stocks to determine which stock is more attractive now.
The Case for Mastercard
Mastercard's key growth engine remains the steady expansion of its payments network alongside its fast-growing value-added services business. In the first quarter of 2026, value-added services and solutions’ net revenues rose 22% year over year, outpacing the 12% growth in payment network net revenues as demand increased for cybersecurity, authentication, consumer engagement and analytics solutions. Cross-border volumes increased 13% year over year, while switched transactions grew 9%, reflecting healthy transaction activity despite geopolitical challenges.
MA is strengthening its presence in the BNPL market through Mastercard One Credential, which allows consumers to access multiple payment options — including debit, credit and installments — through a single credential. The company has expanded the offering through partnerships with SoFi, Fiserv and Blossom, making installment payments more accessible while giving banks and credit unions a flexible payment solution. It beat earnings estimates in each of the past four quarters, with an average surprise of 5.5%.
Mastercard Incorporated Price, Consensus and EPS Surprise
Mastercard Incorporated price-consensus-eps-surprise-chart | Mastercard Incorporated Quote
Mastercard is preparing its network for the next generation of digital commerce. Nearly all Mastercards are now enabled for Mastercard Agent Pay, while Verifiable Intent adds an extra layer of security for AI-driven transactions. The company is also expanding partnerships with OpenAI and Crossmint to support secure autonomous payments, positioning itself at the center of emerging agentic commerce.
Mastercard continues to integrate stablecoins across its ecosystem, including Mastercard Move and settlement capabilities, while the planned acquisition of BVNK is expected to strengthen its ability to send, receive, convert and hold stablecoins. This infrastructure can unlock new use cases in cross-border B2B payments, remittances and payouts without disrupting its core card business.
MA has continued broadening its digital payments ecosystem through new partnerships. The company recently introduced Open USD alongside leading financial and technology partners to simplify stablecoin adoption, expanded Mastercard Move's cross-border payment capabilities and rolled out additional AI-powered fraud prevention and cyber intelligence solutions. These initiatives complement its strategy of generating growth from both payment volumes and higher-value services.
However, the upside was partly offset by escalating operating expenses and higher rebates and incentives. In the first quarter of 2026, adjusted operating expenses rose 11% year over year. Its long-term debt-to-capital of 71.9% is higher than the industry’s average of 39.4% and AFRM’s average of 70.5%.
The Case for Affirm
Affirm continues to strengthen its position in the buy now, pay later (BNPL) market by expanding its merchant network and increasing consumer engagement. In the third quarter of fiscal 2026, gross merchandise volume (GMV) climbed 35% year over year to $11.6 billion, while revenues rose 33% to $1 billion, reflecting healthy consumer demand and higher merchant adoption. Total transactions grew 45% year over year in the third quarter of fiscal 2026.
The company's ecosystem is also benefiting from growing adoption of the Affirm Card, which combines debit functionality with flexible installment payment options. Unlike traditional BNPL products used only at checkout, the card enables consumers to access installment financing for everyday purchases, helping drive repeat usage and strengthening customer relationships beyond one-time transactions. AFRM’s active consumers increased 22% year over year to 26.8 million, while transactions per active consumer improved 20% to 6.7, indicating that customers are using Affirm's platform more frequently.
Affirm is broadening its reach through strategic merchant partnerships and platform integrations. The company recently added Bed Bath & Beyond, Overstock and buybuy BABY to its merchant network, extending financing options across major retail brands. It also continues to deepen relationships with large commerce platforms and payment providers, supporting sustained growth in merchant acceptance and payment volume. As of March 31, 2026, Affirm served approximately 515,000 active merchants, up 43.8% year over year, reflecting broad adoption across online and in-store commerce.
AFRM is also investing in technology and product innovation to diversify its business beyond traditional BNPL services. The company is leveraging artificial intelligence to improve customer experiences and operational efficiency while exploring opportunities in new markets and financial products. These initiatives, combined with its expanding merchant ecosystem and growing consumer base, are expected to support its long-term growth trajectory. It beat earnings estimates in each of the past four quarters with an average surprise of 74.9%.
Affirm Holdings, Inc. Price, Consensus and EPS Surprise
However, the expansion is accompanied by rising cost pressures, with total operating expenses increasing 20.1% year over year in the third quarter of fiscal 2026, primarily due to increased provisions for credit losses, losses on loan purchase commitments, funding costs, technology and data analytics expenses and elevated processing and servicing expenses.
How Do Estimates Compare for MA & AFRM?
Estimates are in favor of AFRM at this stage. The Zacks Consensus Estimate expects MA’s 2026 sales and earnings per share (EPS) to grow 12.9% and 15.4% year over year, respectively. For 2027, EPS is expected to climb another 15.6%.
Meanwhile, AFRM’s fiscal 2026 sales and EPS estimates point to 30.6% and 720% year-over-year increases, respectively, followed by a 39.2% EPS rise in fiscal 2027.
Price Performance Comparison
Over the past six months, Affirm outperformed Mastercard. Meanwhile, the S&P 500 has increased 7.4% during this time.
Price Performance – MA, AFRM & S&P 500
Image Source: Zacks Investment Research
Valuation: MA vs. AFRM
On a price-to-sales basis, MA sits at 12.02X forward revenues, significantly above Affirm’s multiple of 4.62X. AFRM’s cheaper P/S multiple leaves room for significant growth as business expansion accelerates.
Image Source: Zacks Investment Research
Mastercard currently trades below its average analyst price target of $641.64, implying a 17.2% potential upside from current levels. Meanwhile, Affirm currently trades below its average analyst price target of $91.48, implying an attractive 21.5% potential upside from current levels.
Conclusion
Both Mastercard and Affirm are well-positioned to benefit from the continued shift toward digital payments, but their growth profiles differ significantly. While MA offers stability through its diversified payments ecosystem, AFRM stands out with faster revenue growth, stronger earnings momentum, a lower valuation and greater upside potential.
For investors seeking rapid future gains rather than stability, Affirm has the edge at the moment. While AFRM currently carries a Zacks Rank #2 (Buy), MA has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Mastercard vs. Affirm: Which Fintech Stock Has More Room to Run?

Key Points
Circle Internet Group stock fell 44.6% in June 2026, dragged down by Bitcoin's decline and an incoming competitor.
Strategy sold a small portion of its Bitcoin holdings, rattling crypto investors who expected the company to only accumulate.
Circle's USD Coin remains the second-largest stablecoin by market share, but that position now faces serious competition from the Open USD stablecoin.
Shares of Circle Internet Group (NYSE: CRCL) fell 44.6% in June 2026, according to data from S&P Global Market Intelligence. For the first week of that month, Circle's stock followed Bitcoin (CRYPTO: BTC) lower, but at an exaggerated pace. That's life in the crypto sector, even if Circle chiefly manages the popular stablecoin USD Coin (CRYPTO: USDC).
The stock ended June with a single-day plunge of 17.6%. That sudden drop sprang from two concurrent catalysts. A coalition of big-name businesses teamed up to launch the Open USD (CRYPTO: OUSD) stablecoin, threatening Circle's core business directly. At the same time, Circle's stock was removed from five Russell indexes, forcing several funds to drop the stock.
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Strategy's tiny Bitcoin sale spooked the whole market
Bitcoin's price drop reflected economic turbulence, a risk-off investor mood, and unexpected pressure from Strategy (NASDAQ: MSTR). The world's largest holder of Bitcoin sold 0.4% of its holdings to fund operations in U.S. dollars.
The company is still the top Bitcoin owner with 843,775 coins, ahead of the iShares Bitcoin Trust ETF (NASDAQ: IBIT) at 811,291 and the U.S. Bitcoin Treasury with 328,372. But Strategy's executive chairman, Michael Saylor, is known for his maximalist approach to Bitcoin and has promised to continue accumulating it.
So crypto investors are nervous that even Saylor is selling a handful of coins these days. The move unnerved traders across the board, including stablecoin issuers. Due to a rich valuation and high volatility, Circle's stock tends to skyrocket when Bitcoin says "jump," but crash when Bitcoin stumbles.
And then there's the new stablecoin in town. The upcoming launch (scheduled for "later this year") has the backing of financial giants like Visa (NYSE: V) and BlackRock (NYSE: BLK), fintech experts including Klarna (NYSE: KLAR) and Affirm (NASDAQ: AFRM), as well as tech titans Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Samsung Electronics (OTC: SSNLF).
If USD Coin is the digital version of a private commercial bank issuing its own currency (always worth one dollar per coin), the Open USD stablecoin is trying to be the digital equivalent of Visa or the SWIFT interbank payment system. It's a neutral, utility-style network backbone owned and operated by the very institutions that use it.
And it seems destined to grab market share and profits from Circle's USD Coin in the process.
What Circle investors should do now
So, where does this leave Circle? Somewhere between "fine" and "sweating a little."
The Open USD initiative brings deep-pocketed competitors into a market where USD Coin currently holds roughly 26% share, second only to Tether (CRYPTO: USDT). Meanwhile, the Russell index removals reduce passive fund demand for Circle's stock at a time when crypto sentiment remains fragile.
But Circle still runs one of the most trusted stablecoins on the planet. Regulatory clarity has been a tailwind, and USD Coin's reputation for transparency is valuable.
Investors should watch for Circle's response to the looming Open USD challenge. The company could pursue partnerships of its own, lean into regulatory advantages, or expand beyond stablecoin issuance into adjacent services. For now, though, the stock remains chained to Bitcoin's whims and haunted by that shiny new competitor on the horizon.
Circle isn't going away, but its competitive moat is drying out. It's time to circle the wagons.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

How Circle Internet Group Stock Lost 45% Last Month

PayPal Inc. PYPL is strengthening its buy now, pay later (BNPL) offering to enhance branded checkout, attract new customers and help merchants generate higher basket sizes. As consumers increasingly seek flexible payment options, BNPL is becoming an important driver of PayPal's checkout growth strategy.
PayPal identified checkout as a major growth opportunity, noting that digital wallets continue to gain traction as consumers prioritize convenience, security, rewards, loyalty benefits and flexible payment options like BNPL. The company also described BNPL as an important driver of customer acquisition and said the offering remains underpenetrated across its user base, leaving significant room for growth.
Beyond driving customer acquisition, BNPL benefits merchants by encouraging larger basket sizes and improving checkout conversion, supporting higher payment volumes across PayPal's platform. The momentum is reflected in operating performance. During the first quarter, BNPL volume increased 23% year over year, highlighting strong consumer adoption.
PayPal is also investing in expanding BNPL usage. Management said transaction margin growth was partially offset by strategic investments aimed at improving customer habituation and selection rates across branded checkout and BNPL. Likewise, transaction take rate declined partly due to product mix and continued investments in branded checkout and BNPL.
However, BNPL also brings credit and funding considerations. As part of PayPal's broader credit receivables business, its growth depends on effective credit risk management and the successful sale of receivables to third parties. Balancing these risks with continued adoption will be key to sustaining BNPL's long-term contribution to checkout growth.
How Are PYPL’s Competitors Fairing?
Affirm Holdings AFRM offers transparent installment loans, checkout financing and merchant integrations across retail, travel, electronics and e-commerce. Affirm’s latest quarter showed $11.6 billion gross merchandise value (GMV), up 35% YoY, $1.04 billion in revenues, up 33%, and 26.8 million active customers, strengthening AFRM’s BNPL position.
Klarna Group KLAR offers BNPL at a global scale. In first-quarter 2026, Klarna reported $33.7 billion GMV, up 33% YoY, $1 billion in revenues, up 44%, and $68 million in adjusted operating profit. KLAR’s merchant network, app tools and U.S. growth make KLAR relevant to PayPal.
PYPL’s Price Performance, Valuation & Estimates
Shares of PayPal have declined 1.6% over the past three months, underperforming both the broader industry and the S&P 500 Index.
Image Source: Zacks Investment Research
In terms of forward 12-month P/E, PYPL stock is trading at 8.14X, which is at a significant discount to the Zacks Financial Transaction Services industry’s 18.5X.
Image Source: Zacks Investment Research
PayPal’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised upward over the past week.
Image Source: Zacks Investment Research
PayPal currently carries a Zacks Rank #4 (Sell).
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PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
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PayPal's BNPL Push: Will It Drive Higher Checkout Basket Sizes?

Affirm Holdings, Inc. AFRM has entered a new partnership with Bed Bath & Beyond, making its buy now, pay later (BNPL) solution available to eligible shoppers across the retailer's brands, including Bed Bath & Beyond, Overstock and buybuy BABY. Customers can choose to pay for purchases in biweekly or monthly installments with no late or hidden fees, offering greater payment flexibility while shopping for home-related products.
The agreement expands Affirm's presence in the home retail market, where purchases often involve a higher ticket size than everyday discretionary spending. By giving consumers more payment choices at checkout, the company could attract new users and encourage higher transaction activity. The partnership also allows Affirm to reach shoppers during key life events, such as moving into a new home or preparing for a growing family.
The addition further strengthens AFRM's merchant portfolio. As of March 31, 2026, the company’s active merchants were around 515,000, up 43.8% year over year. Expanding relationships with well-known brands enhances the company's reach, increases consumer touchpoints and supports growth in gross merchandise volume (GMV). In the third quarter of fiscal 2026, GMV grew 35% year over year, while total transactions increased 45%, highlighting strong platform engagement.
As demand for flexible payment solutions continues to grow, adding established retailers can support broader platform adoption and higher payment volumes. The Bed Bath & Beyond partnership aligns with Affirm's strategy of expanding its merchant network and should strengthen its long-term growth opportunities in the evolving digital payments landscape.
How Are Competitors Faring?
Some of AFRM’s competitors in the BNPL space are PayPal Holdings, Inc. PYPL and Visa Inc. V.
PayPal reported 439 million active accounts in the first quarter of 2026, which rose 1% year over year. Its net revenues increased 7% year over year to $8.4 billion in the same quarter. Additionally, PayPal’s total payment volume increased 11% year over year in the first quarter of 2026.
Visa’s processed transactions increased 9% year over year in the second quarter of fiscal 2026. Visa’s payment volume rose 9% year over year in the second quarter of fiscal 2026, along with 17% growth in net revenues.
Affirm’s Price Performance, Valuation & Estimates
Over the past year, AFRM’s shares gained 21.2% against the industry’s fall of 19.5%.
Image Source: Zacks Investment Research
From a valuation standpoint, AFRM trades at a forward price-to-sales ratio of 6.66, above the industry average of 3.66.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Affirm’s fiscal 2026 earnings implies 726.7% growth from the year-ago period. The consensus mark for fiscal 2026 revenues indicates 30.6% year-over-year growth.
Image Source: Zacks Investment Research
Affirm currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Can Affirm Benefit From Its Bed Bath & Beyond Partnership?

Penguin Solutions, Inc. PENG looks highly attractive from a valuation perspective. In terms of 12-month Price/Sales (P/S), PENG is currently trading at 1.81X, lower than the Zacks Internet – Software industry’s 3.66X and the Zacks Computer and Technology sector’s 6.62X, making the stock seem less expensive in comparison.
AI-focused technology peers, such as Affirm AFRM, Meta Platforms META and Snowflake SNOW, command richer valuations of 6.66X, 5.57X and 13.54X, respectively. Given Penguin Solutions' expanded AI Factory platform, growing MemoryAI portfolio and increasing traction across enterprise, sovereign and NeoCloud AI markets, this discounted valuation appears attractive. These initiatives could strengthen its long-term growth profile if execution remains on track.
PENG Forward 12 Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
However, valuation alone does not make a stock attractive. Investors should look beyond valuation metrics and assess whether the discount is justified based on the company's business fundamentals. Let's dig deeper.
PENG Stock Outperforms Industry, Sector & S&P 500
Penguin Solutions shares have skyrocketed 226.5% over the past six months, comfortably outperforming the industry's 12.8% decline, the broader sector's 17.1% gain and the S&P 500 Composite's 8.8% return.
The stock has also outpaced key peers, including Snowflake, Affirm and Meta Platforms. Over the same time frame, shares of Snowflake and Affirm have gained 16.4% and 3.7%, while Meta Platforms’ shares have lost 7%.
PENG 6-Month Performance Chart
Image Source: Zacks Investment Research
Memory-Centric AI Architecture Gives PENG an Edge
Penguin Solutions is positioning memory architecture as a key competitive advantage as artificial intelligence shifts from model training to inference. Management believes inference workloads are memory-bound and latency-sensitive, requiring significantly more scalable memory than traditional AI training. This transition is expected to expand demand beyond high-bandwidth memory (HBM) used with GPUs to include general-purpose memory that supports inference serving and reinforcement learning pipelines. As enterprise, neocloud and sovereign AI customers move from experimentation to production deployments, Penguin Solutions expects growing demand for integrated AI infrastructure combining compute, memory, software and services.
To capitalize on this opportunity, Penguin Solutions has expanded its AI Factory Platform with the MemoryAI product family, including CXL-based memory systems and the MemoryAI KV Cache server. The company believes Compute Express Link (CXL) technology addresses the growing "memory wall" by enabling shared memory across CPUs and GPUs, improving memory utilization, reducing latency and accelerating large language model responses. Early commercial wins, including deployment at a Tier-1 financial institution and growing CXL orders from enterprise generative AI customers, validate this strategy. Combined with continued investments in photonic memory appliances and advanced memory architectures, Penguin Solutions is strengthening its long-term competitive position in AI infrastructure while creating opportunities for durable, higher-value growth.
Strong AI Partnerships Bode Well for PENG
Penguin Solutions is leveraging strategic partnerships as a key pillar of its long-term AI growth strategy, strengthening its ability to deliver comprehensive AI factory solutions while accelerating customer adoption. Rather than competing directly with semiconductor leaders, the company collaborates with NVIDIA, Dell Technologies and SK Telecom to integrate best-in-class compute, networking, software and deployment capabilities into its AI Factory Platform. As enterprises increasingly seek end-to-end AI infrastructure spanning compute, memory, storage, networking, software and services, PENG's partner ecosystem enhances its competitive positioning and broadens its addressable market.
The strategy is already translating into commercial success across multiple industries. During the quarter, Penguin Solutions highlighted deployments for a Tier-1 financial institution using its MemoryAI and ClusterWare platform, healthcare solutions with Dell, enterprise voice AI with Deepgram and Dell, and research systems with Georgia Tech and NVIDIA.
Beyond current customer wins, Penguin Solutions believes its integrated partner ecosystem will remain a key long-term competitive advantage. Combined with end-to-end AI system design, deployment and managed services, these partnerships enable customers to adopt complex AI infrastructure more efficiently.
Positive Analyst Sentiment for PENG
Analysts remain increasingly optimistic about Penguin Solutions' earnings outlook, as reflected in upward estimate revisions for fiscal 2026 and 2027 over the past 30 days.
The Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $2.30 per share, implying 21.1% year-over-year growth, while the fiscal 2027 estimate stands at $3.15, indicating a further 37% increase.
Image Source: Zacks Investment Research
Hurry Up & Buy PENG Now
Penguin Solutions combines an attractive valuation with expanding AI growth opportunities and improving earnings expectations. Its AI Factory platform, innovative memory-centric architecture and strategic partnerships strengthen its competitive position as enterprise, sovereign and NeoCloud AI adoption accelerates. If the company continues delivering on its execution roadmap, the stock's current valuation may not fully reflect its long-term potential, making it an attractive stock for investors seeking exposure to AI infrastructure growth. With several catalysts supporting future expansion, PENG looks like a compelling buying opportunity for long-term investors.
PENG currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Does PENG Stock's Lower Valuation Signal a Smart Buying Opportunity?

Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Jack in the Box, Inc. (Symbol: JACK), where a total volume of 6,018 contracts has been traded thus far today, a contract volume which is representative of approximately 601,800 underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 82% of JACK's average daily trading volume over the past month, of 734,055 shares. Especially high volume was seen for the $15 strike call option expiring July 17, 2026, with 3,312 contracts trading so far today, representing approximately 331,200 underlying shares of JACK. Below is a chart showing JACK's trailing twelve month trading history, with the $15 strike highlighted in orange:
KB Home (Symbol: KBH) options are showing a volume of 9,678 contracts thus far today. That number of contracts represents approximately 967,800 underlying shares, working out to a sizeable 74% of KBH's average daily trading volume over the past month, of 1.3 million shares. Particularly high volume was seen for the $60 strike put option expiring July 17, 2026, with 4,415 contracts trading so far today, representing approximately 441,500 underlying shares of KBH. Below is a chart showing KBH's trailing twelve month trading history, with the $60 strike highlighted in orange:
And Affirm Holdings Inc (Symbol: AFRM) saw options trading volume of 34,673 contracts, representing approximately 3.5 million underlying shares or approximately 72.6% of AFRM's average daily trading volume over the past month, of 4.8 million shares. Especially high volume was seen for the $80 strike call option expiring June 26, 2026, with 3,959 contracts trading so far today, representing approximately 395,900 underlying shares of AFRM. Below is a chart showing AFRM's trailing twelve month trading history, with the $80 strike highlighted in orange:
For the various different available expirations for JACK options, KBH options, or AFRM options, visit StockOptionsChannel.com.
Further JACK Research:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Noteworthy Wednesday Option Activity: JACK, KBH, AFRM

Shares of Affirm Holdings, Inc. AFRM have climbed 13.3% over the past month, handily beating the broader industry, which slipped 2.6%, while the S&P 500 was little changed. The rally reflects growing confidence in the company’s growth prospects, improving profitability and an expanding ecosystem. Among major buy now, pay later (BNPL) peers, PayPal Holdings, Inc. PYPL has fallen 3.9% during the same period, while Klarna Group plc KLAR has gained 13.7%.
Price Performance – AFRM, PYPL, KLAR, Industry & S&P 500
Image Source: Zacks Investment Research
Let’s look at its growth drivers.
AFRM’s New Initiatives Are Opening More Doors
Affirm’s newer offerings are beginning to play a bigger role in its growth story. The Affirm Card, digital wallet integrations, agentic commerce initiatives and the recently launched Affirm Edge are creating additional ways for customers to use the platform. Active cardholders reached 4.4 million in the fiscal third quarter, while card GMV alone soared 146% year over year, helped by the company’s cash-flow underwriting model.
Affirm also strengthened its relationship with Google by integrating its BNPL services to Google Search, AI Mode and the Gemini app through Google Pay. The move expands its reach and could drive higher transaction volumes over time.
Funding capacity also continues to improve. Earlier this month, Affirm expanded its partnership with Canada Pension Plan Investment Board. The agreement is expected to support roughly $8 billion in consumer loan volume over the next two years, underscoring institutional confidence in the company’s underwriting and credit performance.
AFRM Building Scale Across Consumers and Merchants
Despite uncertainty in the broader economy, Affirm continues to deepen its presence through partnerships, product innovation and a growing customer base. These efforts are expanding its addressable market and reducing reliance on any single growth driver.
Active consumers rose 22% year over year to 26.8 million in the fiscal third quarter. Usage is spreading beyond large purchases into categories such as groceries, fuel, travel and subscriptions, making the platform more relevant to everyday spending.
Transactions increased 45% to 45.3 million in the latest quarter. Repeat users accounted for about 96% of total transactions, showing that customers continue to come back. Gross merchandise volume rose 35% to $11.6 billion. For fiscal 2026, management expects GMV between $49.265 billion and $49.565 billion. It has also outlined a medium-term goal of reaching $100 billion in annual GMV, supported by at least 25% yearly growth.
Merchant adoption is also gaining momentum. Active merchants climbed 44% from a year ago to 515,000 as of March 31, 2026, reflecting steady demand for flexible payment options.
Earnings Outlook for AFRM Remains Bright
The Zacks Consensus Estimate for fiscal 2026 earnings of $1.25 per share indicates a 733.3% year-over-year surge, while the estimate for fiscal 2027 earnings implies further growth of 35.6%. Moreover, the consensus mark for fiscal 2026 and 2027 revenues suggests 30.6% and 26.5% year-over-year growth, respectively.
It has delivered solid financial results lately, beating earnings estimates in each of the trailing four quarters, the average surprise being 74.9%.
Affirm Holdings, Inc. Price, Consensus and EPS Surprise
Risks Still Deserve Attention
The outlook is not without challenges. Inflation concerns and uneven economic conditions continue to raise questions about consumer spending and borrowers’ ability to manage debt. Provision for credit losses increased 24.6% in the first nine months of fiscal 2026, reflecting a more cautious view of the environment.
Competition is intensifying as Klarna and other fintech firms aggressively pursue market share. Walmart’s decision last year to replace Affirm with Klarna as its exclusive BNPL provider highlighted how quickly key partnerships can change.
Leverage is another concern. Funding debt stood at $2.4 billion at the end of the fiscal third quarter, up from $1.6 billion at fiscal 2025-end. The company’s debt-to-capital ratio of 67.7% remains well above the industry average of 21.4%. PayPal, by comparison, stands at 32%.
The stock trades at 4.67X forward 12-month sales, slightly above its three-year median of 4.40X and the industry average of 3.66X, leaving little room for disappointment. PayPal and Klarna trade far lower, at 1.07X and 1.46X forward sales, respectively.
Conclusion
Affirm is executing well, supported by strong user engagement, expanding products and improving earnings prospects. Its growing merchant network and rising transaction volumes provide a solid foundation for long-term growth. However, elevated leverage, rising credit-loss provisions, intense competition and a premium valuation remain key concerns.
While the company’s growth story remains compelling, these risks warrant caution in the short run. Reflecting the balance between favorable fundamentals and the challenges, Affirm currently carries a Zacks Rank #3 (Hold), suggesting investors may want to wait for a more attractive entry point or additional catalysts. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.