4u Created
Image default
Business

BNPL provider Affirm plunges 15% as guidance cut offsets a ‘solid’ quarter By Investing.com



© Reuters. BNPL provider Affirm (AFRM) plunges 15% as guidance cut offsets a ‘solid’ quarter

By Senad Karaahmetovic

Affirm (NASDAQ:) saw its shares drop by over 15 % in U.S. pre-market trading after the buy-now-pay-later (BNPL) firm slashed its full-year forecast.

Affirm reported an FQ1 of $0.86 on revenue of $361.62 million. Analysts were expecting a loss per share of $0.84 on revenue of $360.4M.

For its second fiscal quarter, FQ2 revenue is seen in the range of $400M to $420M, a miss compared to the $438.5M. At the midpoint of the range, Affirm’s guidance implies a 13.5% quarter-over-quarter growth while analysts were looking for nearly a 22% increase.

As a result of the bigger-than-expected slowdown, Affirm now sees full-year revenue at $1.64B (up or down $40M), down from the prior outlook of $1.63-1.73B. Analysts were expecting a full-year revenue forecast of $1.71B.

While FQ1 results were “solid,” RBC analysts say a “faster-than-expected reduction in business from Peloton as well as overall macro conditions” prompted AFRM to cut its full-year outlook. They slashed the price target to $23 per share from $31.

“Despite these pressures, management reiterated its plans to achieve ‘sustained’ adj. operating income profitability, on a run rate basis, by the end of FY23,” they wrote in a note.

Morgan Stanley analysts believe the investor focus is likely to be on ongoing credit deterioration.

“Updates around demand, RLTC margin, & profitability should be reassuring while we’re mixed on funding as the market remains challenged but AFRM expanded capacity in the Sept qtr,” the analysts wrote to clients.



Source link

Related posts

Turkey blames blast on Kurdish militants, arrests 22, including suspected bomber By Reuters

Hurricane Roslyn brings brutal winds, flooding to Mexico’s Pacific coast By Reuters

Union Pacific PT Lowered to $220 at Benchmark