{"id":1645,"date":"2023-02-23T08:11:20","date_gmt":"2023-02-23T08:11:20","guid":{"rendered":"https:\/\/tradersontrend.com\/?p=1645"},"modified":"2023-02-23T08:11:20","modified_gmt":"2023-02-23T08:11:20","slug":"affirm-shaping-up-to-be-a-bad-stock-for-2023","status":"publish","type":"post","link":"https:\/\/tradersontrend.com\/h\/2023\/02\/23\/affirm-shaping-up-to-be-a-bad-stock-for-2023\/","title":{"rendered":"Affirm Shaping Up to be a Bad Stock for 2023"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"1645\" class=\"elementor elementor-1645\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-32760862 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"32760862\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-51681f41\" data-id=\"51681f41\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-5d2bed25 elementor-widget elementor-widget-text-editor\" data-id=\"5d2bed25\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.21.0 - 26-05-2024 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p>Perhaps you&#8217;re looking for a fintech stock to invest in and hold in 2023. That&#8217;s good, but Affirm Holdings (<a href=\"https:\/\/www.google.com\/finance\/quote\/AFRM:NASDAQ\">NASDAQ: AFRM<\/a>) is inappropriate because the company is still grappling with the consequences of <a href=\"https:\/\/www.hr-brew.com\/stories\/2022\/12\/06\/how-over-hiring-during-the-pandemic-led-to-the-rash-of-layoffs-in-2022\">pandemic-era over-hiring<\/a>. <br \/><br \/>I am neutral on AFRM shares because the company&#8217;s latest results were underwhelming, and an inflation-driven decline in client spending is anticipated to pose Affirm more troubles.<\/p><p>Affirm Holdings, based in California, offers <a href=\"https:\/\/www.investopedia.com\/buy-now-pay-later-5182291\">&#8216;buy now, pay later&#8217; (BNPL)<\/a> services via a mobile application. <br \/><br \/>This platform&#8217;s goal is to &#8220;<em>present consumers exactly what they will pay up front, never raise that amount, and never impose any late or hidden costs.<\/em>&#8220;<\/p><p>It&#8217;s an intriguing credit card option, but Affirm Holdings is particularly exposed to swings in interest rates and inflation. <br \/><br \/>Furthermore, it looks like Affirm&#8217;s previous management missteps are now catching up with it, potentially causing further financial harm to the floundering fintech startup.<br \/><br \/><strong><span style=\"font-size: 24.5px; font-family: inherit;\">Over-Hiring at Affirm Leads to Job Cuts<br \/><br \/><\/span><\/strong><a style=\"font-family: inherit;\" href=\"https:\/\/www.cnbc.com\/2023\/02\/08\/affirm-cuts-19percent-of-workforce-shares-tank-on-earnings-miss.html\">Affirm Holdings recently announced job layoffs<\/a><span style=\"font-family: inherit;\">, joining what I refer to as the increasing &#8216;tech layoff club.&#8217; <br \/><br \/>You may have heard of technology companies cutting 5% or 10% of their workforce but, Affirm&#8217;s employment loss of 19% is particularly concerning.<\/span><\/p><p>For one thing, massive job layoffs might jeopardize Affirm&#8217;s capacity to support customers, develop new goods and services, and so on. Yet, the large-scale layoffs reflect the dubious decisions made by Affirm Holdings&#8217; management.<\/p><p>&#8220;<em>The core cause of where we are today is that I moved too slowly as these macroeconomic factors developed,<\/em>&#8221; Affirm Holding CEO Max Levchin admitted in a note to workers. After rapidly expanding in the aftermath of the COVID-19 outbreak and the resulting tech boom, Affirm &#8220;<em>intentionally hired ahead of the income required to support the size of the team.<\/em>&#8221; <br \/><br \/>According to the Wall Street Journal, the corporation now plans to pay between $35 million and $39 million in restructuring charges.<\/p><p>To put it another way, Affirm overhired, and now the company, its stockholders, and 19% of its employees are suffering the price. <br \/><br \/>To be sure, Affirm Holding&#8217;s management couldn&#8217;t have predicted strong inflation and rising interest rates, which aren&#8217;t ideal for a company aiming to operate in the BNPL area. Yet, it appears that Affirm overestimated its capabilities and will have to accomplish more with less in 2023.<br \/><br \/><strong><span style=\"font-size: 24.5px; font-family: inherit;\">AFRM Net Loss Almost Doubles<br \/><br \/><\/span><\/strong><span style=\"font-family: inherit;\">It&#8217;s one thing to have a bad quarter; it&#8217;s quite another to nearly double a company&#8217;s net loss. Affirm Holdings&#8217; fourth-quarter 2022 results &#8220;<\/span><em style=\"font-family: inherit;\">disappointed<\/em><span style=\"font-family: inherit;\">&#8221; Mizuho analyst Dan Dolev, and you&#8217;ll probably agree that the data is troubling.<\/span><\/p><p>Here&#8217;s what I think was the most disappointing: The net loss of Affirm Holdings nearly doubled from $159.46 million in the previous quarter to $324.01 million in Q4 2022. <br \/><br \/>Affirm&#8217;s loss per share increased from $0.57 to $1.10 throughout that time period. <br \/><br \/>Nevertheless, this performance fell short of Wall Street&#8217;s projection of a net loss of $0.99 per share.<\/p><p>In terms of revenue, AFRM&#8217;s $400 million in quarterly sales fell short of analysts&#8217; consensus forecast of $416 million. <br \/><br \/>Levchin said that Affirm &#8220;<em>began increasing pricing for our merchants and consumers later in the year than we should have, and this process has taken us longer than we intended.<\/em>&#8221; This &#8220;<em>harmed both our capacity to approve more consumers and boost our profit,<\/em>&#8221; the CEO stated.<\/p><p>It&#8217;s wonderful to admit mistakes, but this raises an important question: how long will it take Affirm Holdings to fix its previous mistakes? <br \/><br \/>Prospective investors may also concern whether Affirm&#8217;s management will continue to make poor decisions during these difficult economic times.<br \/><br \/><strong><span style=\"font-size: 24.5px; font-family: inherit;\">Experts say AFRM Stock is a Good Buy<br \/><br \/><\/span><\/strong><span style=\"font-family: inherit;\">According to Wall Street, AFRM is a Hold with three Buys, ten Holds, and one Sell. <br \/><br \/>Affirm Holdings&#8217; average price target is $14.96, showing an 11.1% upside potential.<\/span><\/p><p>Should You Buy AFRM Stock?<\/p><p>At best, I am neutral on AFRM shares because the <a href=\"https:\/\/www.krungsri.com\/en\/research\/research-intelligence\/buy-now-pay-later\">BNPL market may revive<\/a>, which might benefit Affirm Holdings and its stockholders. <br \/><br \/>A turnaround, on the other hand, would necessitate better decision-making from Affirm&#8217;s management and would most certainly take months, if not the entire year of 2023, to achieve.<\/p><p>As a result, now is probably not the time to consider investing in AFRM stock. <br \/><br \/>Use it as a lesson in the unintended consequences of poor executive-level decisions and how tough it may be to undo the damage.<\/p><p><em>For More Stocks And Investment Related News, Click\u00a0<a href=\"https:\/\/tradersontrend.com\/\" target=\"_blank\" rel=\"noopener\" data-saferedirecturl=\"https:\/\/www.google.com\/url?q=https:\/\/tradersontrend.com\/&amp;source=gmail&amp;ust=1677225835289000&amp;usg=AOvVaw2uzJQjC-bhza6tL5AGZvWQ\">Here<\/a>.<\/em><\/p><p>\u00a0<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Perhaps you&#8217;re looking for a fintech stock to invest in and hold in 2023. That&#8217;s good, but Affirm Holdings (NASDAQ: AFRM) is inappropriate because the company is still grappling with the consequences of pandemic-era over-hiring. I am neutral on AFRM shares because the company&#8217;s latest results were underwhelming, and an inflation-driven decline in client spending&#8230;<\/p>\n","protected":false},"author":1,"featured_media":1646,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[14,15,89,313],"class_list":["post-1645","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-newsletter","tag-affirm-holdings","tag-afrm","tag-bnpl","tag-inflation"],"_links":{"self":[{"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/posts\/1645","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/comments?post=1645"}],"version-history":[{"count":0,"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/posts\/1645\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/media\/1646"}],"wp:attachment":[{"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/media?parent=1645"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/categories?post=1645"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/tags?post=1645"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}