Affirm added as a new long idea at Hedgeye

Affirm Holdings (NASDAQ:AFRM) was added as a new long idea at Hedgeye.

“The value-seeking zeitgeist of the current consumer is very much working in the favor of Affirm, particularly in the short-run as any discretionary purchases are likely to be made with the help of BNPL,” Hedgeye analyst Josh Steiner wrote in a note on Wednesday. “The timing of the Affirm Card reinforces this dynamic as it extends the increases in purchasing power from BNPL to non-discretionary and smaller categories of spending as well. “

Affirm (AFRM) may also benefit as history shows that periods of increased gas prices have coincided with increased BNPL usage as consumers “avail themselves to the crutch of installment financing for their purchases,” Steiner added.

The Hedgeye long call comes as Morgan Stanley on Wednesday also raised Affirm (AFRM) to equal weight from under weight as the company’s better distribution, promotion, and pricing to attract higher income consumers. Shares of Affirm (AFRM) rose 5%.

“…We will be riding AFRM as a long through the fourth quarter on the expectation that GMV growth is strong, credit outcomes are managed, and profitability goals are further progressed, particularly in light of the lower funding costs ushered in by the Fed’s rate cutting cycle,” Steiner wrote.