Affirm Holdings (AFRM) was trading higher as Needham raised its recommendation on the stock after the fintech submitted an application for a limited bank charter.
Shares were +3.48% pre-market to $71.10.
“We believe this could be a game-changer for AFRM as it would give AFRM access to deposit funding for loans, reduce third-party risk by moving several products in-house (rather than offering them through banking partners), while also potentially accelerating growth and/or product development,” said Needham analysts.
The investment bank said it is increasingly confident in AFRM’s medium-term growth and profitability outlook, and upgraded the shares to Buy from Hold with a price target of $100.
Needham’s rating aligns with the average sell-side analysts and Seeking Alpha authors rating of Buy. Meanwhile, SA’s Quant rating system grades the stock as Hold.