Affirm Holdings (AFRM) just handed Wall Street a quarter that was hard to argue with, and Bank of America came away more bullish than before.
The buy now, pay later company reported record fiscal fourth-quarter results in late August, and its shares jumped on the news.
Now BofA is telling clients the market still hasn’t priced in what could come next.
The bank raised its 12-month price target on Affirm to $104 from $93 while keeping its Buy rating. That’s a call that points to roughly 34% to 35% upside from where the stock traded after earnings.
BofA sees Affirm’s guidance as too cautious to trust at face value
BofA analyst Matthew O’Neill lifted the target after Affirm’s fiscal Q4 2026 report, and his reasoning starts with the company’s own forecast.
Affirm guided its next fiscal year toward more than $64 billion in gross merchandise volume, which works out to at least 27% growth from about $50.2 billion in fiscal 2026, Invezz reported.
O’Neill thinks that number is a floor, not a real ceiling. His view is that management set the bar low on purpose, giving Affirm room to beat expectations and raise guidance quarter after quarter.
For investors, that framing matters because a “beat and raise” pattern tends to support a stock over time, since each quarter that clears a low bar can push estimates and the share price higher.
The growth drivers BofA says aren’t in the price yet
Part of the bull case rests on things Affirm hasn’t built into its official numbers at all.
O’Neill flagged several future catalysts that sit entirely outside current guidance, CNBC reported. Those include a possible bank charter, a business-to-business payments push, long-duration lending in the United Kingdom, and brand-sponsored promotions.
A bank charter would let Affirm hold more of its own deposits and lend directly, which can lower funding costs and lift margins over time.
The B2B rollout would open a new customer base beyond everyday shoppers, giving Affirm a second engine for volume.
None of that shows up in the $64 billion figure yet, so any progress on these fronts could act as a bonus on top of the base case.
What Wall Street got wrong about Affirm’s credit numbers
One early worry after earnings was a jump in Affirm’s provision density, which is the share of funds a lender sets aside to cover loans that might not be repaid. A rising number there can signal that borrowers are struggling, so investors paid attention to it.
BofA pushed back on that read.
The bank said the shift came from a change in Affirm’s mix of loan products and funding, not from weaker credit or trouble with its international loans.
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In plain terms, the money set aside moved because the type of loans changed, not because customers stopped paying.
That distinction separates a warning sign from simple accounting, and BofA landed firmly on the accounting side.
How strong the quarter actually was for Affirm
The numbers behind the upgrade were the real fuel.
Affirm posted gross merchandise volume of $14.1 billion, a 36% jump from a year earlier, according to Yahoo Finance.
Revenue rose 33% to about $1.2 billion, and revenue less transaction costs, the profit measure Affirm watches most closely, climbed 39% to $589 million.
Adjusted earnings came in at $4.62 per share, well ahead of the $3.77 that analysts expected, Invezz reported.
Net income reached $1.6 billion, helped by a tax accounting adjustment, and the quarter marked Affirm’s most profitable on record.
Here is how the stock stacks up against the broader market.
Affirm stock vs. the S&P 500
- Past week: AFRM roughly flat near $77.76, in line with a mostly quiet S&P 500
- Year to date: AFRM up about 5%, close to the broad market’s modest gain
- Past six months: AFRM up around 65%, far outpacing the index
Other Wall Street firms echo BofA’s bullish call
BofA is part of a wider group of analysts moving in the same direction.
BMO Capital lifted its target to $101 from $86, Investing.com reported. RBC Capital went to $96, and Needham raised its call to $100.
J.P. Morgan moved to $105 from $90, and Citi sits at $115, giving Affirm a cushion of institutional support that can steady a stock when sentiment turns.
More Payments and Growth Stocks:
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- Morgan Stanley resets CrowdStrike stock price target after earnings
O’Neill’s $104 target uses the same method BofA has kept all along, applying a 10x multiple to its forward revenue-less-transaction-cost estimate.
When several banks cluster in a tight range like this, it tends to reduce the odds of a sharp downgrade shock, though it never removes the risk.
What everyday investors can watch from here
A single high-growth fintech stock can swing hard, so treating a bullish target as a green light for an oversized bet can be risky.
Growth names like Affirm stay sensitive to consumer credit health, interest rates, and any shift in regulation around buy now, pay later lending.
If you hold Affirm or are weighing a position, a few checkpoints can tell you whether BofA’s thesis is holding up.
Signals to track on Affirm
- Quarterly results: Watch whether Affirm keeps beating its own conservative guidance rather than just meeting it
- Bank charter news: Any move toward a federal charter would open the margin improvement BofA is counting on
- B2B timeline: Updates on business payment integrations would show the second growth engine coming online
- Credit trends: Keep an eye on delinquencies and provision density in future quarters to confirm credit stays healthy
Spreading risk across more than one holding remains a sensible guardrail with any stock this volatile.
The bottom line on Affirm’s $104 call
BofA’s message is straightforward. Affirm’s guidance looks cautious, its credit picture is healthier than the headline provision number suggested, and its biggest future catalysts aren’t in the price.
That combination is why O’Neill sees close to 35% upside even after a strong run.
The stock still trades well below the bank’s target, so the distance between price and forecast leaves room for gains if Affirm keeps executing.
The practical takeaway for readers is to watch the next two or three quarters closely, since that is where BofA’s beat-and-raise outlook will either prove itself or fall short.
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