Affirm (AFRM) & Liberty Travel Partner to Expand Payment Options
Affirm Holdings, Inc. AFRM recently announced its partnership with a travel platform — Liberty Travel. The deal enables Affirm to provide flexible payment options, like buy now pay later (BNPL), to consumers for travel bookings, which will boost its transaction volumes.
The deal comes at an opportune time for AFRM as demand for flexible payment options in travel booking is rapidly increasing. The company’s travel and ticketing purchase volume surged 60% year over year in the September quarter. The latest move is expected to make Affirm’s payment options available at the checkout for qualifying Liberty Travel customers. Customers will be able to divide the total cost into monthly payments for purchases of more than $250.
This move adds Liberty Travel to Affirm’s network of more than 266,000 merchants.The massive network includes merchants like Great Wolf Lodge, American Airlines, CheapOair and many others. The collaboration is expected to boost Liberty Travel sales, provide flexible payment options, increase average order value and improve conversion rates. As Affirm will not charge late and hidden fees, it is expected to witness significant demand growth.
Per a recent Affirm research, more than 50% of people look for BNPL options while checking out. Liberty Travel and Affirm’s partnership is expected to cater to travelers’ needs for such a solution. As travel is expected to rise in the coming year, BNPL options are expected to increase the purchasing power of travelers. Increased active merchants, gross merchandise volume and transactions are aiding AFRM’s results.
Partnerships like this will aid the company in achieving its goal of reaching profitability in fiscal 2024 on an adjusted operating income basis. Also, the adjusted operating margin is expected to be more than 2% in fiscal 2024, indicating a significant improvement from the negative 4.6% witnessed in fiscal 2023.
Price Performance
Over the past year, shares of Affirm have surged 362.9% compared with the 24.2% rise of the industry it belongs to.
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Zacks Rank & Other Key Picks
Affirm currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Business Services space are FirstCash Holdings, Inc. FCFS, Shift4 Payments, Inc. FOUR and RB Global, Inc. RBA. While FirstCash and Shift4 Payments currently sport a Zacks Rank #1 (Strong Buy) each, RB Global carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FirstCash’s current-year bottom line indicates 13.1% year-over-year growth. Headquartered in Fort Worth, TX, FCFS beat earnings estimates in all the past four quarters, with an average surprise of 7.9%.
The Zacks Consensus Estimate for Shift4 Payments’ current-year earnings is pegged at $2.92 per share, which indicates 110.1% year-over-year growth. Allentown, PA-based FOUR beat earnings estimates in all the past four quarters, with an average surprise of 25%.
The Zacks Consensus Estimate for RB Global’s current-year bottom line suggests 15.4% year-over-year growth. Based in Westchester, IL, RBA beat earnings estimates in each of the past four quarters, with an average surprise of 18.9%.
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