BTIG analyst Vincent Caintic sees Affirm Holdings Inc (NASDAQ: AFRM) as one of the best-positioned names to capitalize on continued demand for buy now, pay later (BNPL) services that are particularly sitting well with Gen Z.
Shares of the financial technology company have already rallied some 90% over the past two months – but the investment firm is convinced that it’s not too late, at least for long-term investors, to park some of their capital in AFRM.
Caintic now rates Affirm stock a “buy” and expects it to hit $68 by the end of 2025.
In his recent note to clients, he even dubbed it a better pick than American Express.
Affirm stock could soon be free of a huge overhang
Affirm has partnered with industry leaders like Apple and Amazon to bring BNPL services to over 18 million users worldwide.
That’s significant since more users mean more transactions that its management sees as central to achieving profitability.
In August, the fintech firm reported $7.2 billion in gross merchandise value for its fourth financial quarter—up a whopping 31% from last year.
AFRM has already turned a non-GAAP operating profit, which confirms it’s moving in the right direction.
The Nasdaq-listed firm has also generated free cash flow of close to $300 million over the past 12 months.
So, it’s becoming increasingly likely that the company will soon achieve profitability, which will remove a huge overhang from Affirm stock.
Could AFRM shares eventually make you a millionaire?
Affirm Holdings sits right at the heart of the financial services sector leaving it with a total addressable market of several trillion dollars.
In comparison, its market cap is capped at under $14 billion at writing, indicating massive room for growth.
Estimates are for this California headquartered firm to grow at an annual rate of more than 24% through the end of this decade.
AFRM has started exploring point-of-sale opportunities that may help boost its share price as well.
Most importantly, the company’s services are gaining traction among younger consumers which suggests the BNPL craze is here to stay for the long-term.
That’s partly why the BTIG analyst even expects Affirm to beat AMEX in terms of operating income margin.
The metric currently sits at 19% for Affirm Holdings and 20% for American Express.
All in all, it’s not entirely clear whether Affirm stock has the potential for the kind of explosive growth that could make you a millionaire, there’s sufficient evidence to believe that it’s not done pleasing its shareholders just yet.
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