How Is Affirm Card Reshaping AFRM's Direct-to-Consumer Growth?
Affirm Holdings, Inc.’s AFRM direct-to-consumer business is becoming a more important growth avenue as Affirm Card extends the company’s reach beyond merchant checkout. The product allows consumers to use Affirm across a broader range of online and in-store purchases. Affirm Card GMV more than doubled year over year in the fiscal fourth quarter to $2.84 billion, while active Card consumers increased 125% to 5.2 million. The card attach rate reached 19%.
The bigger opportunity lies in engagement. Card adoption is also deepening engagement by enabling consumers to use Affirm more frequently, particularly for in-store purchases and at merchants without direct Affirm checkout integration. At the end of the second quarter, Affirm Card represented about 15% of total transactions, up from 10% a year earlier, indicating its growing role in driving repeat activity across the platform.
Affirm Card is also changing the composition of Affirm’s direct-to-consumer growth. Direct-to-consumer products, including Affirm Card, generally generate lower merchant revenues and are predominantly interest-bearing. Card network revenues increased 27% to $294 million in fiscal 2026, supported by higher activity across Affirm Card, virtual debit cards and other card-based merchant integrations.
With penetration still at 19% of active consumers, Affirm has room to deepen adoption. Improving the in-store experience and adding Card-specific features could further lift usage and expand transactions beyond integrated merchant checkout. A larger card base could also increase the contribution of direct-to-consumer products to Affirm’s overall growth.
How Are Competitors Faring?
Key competitors in the BNPL and digital payments market include Sezzle Inc. SEZL and Klarna Group plc KLAR. Sezzle continues to expand through growing consumer adoption and flexible payment options. At the end of the second quarter, SEZL had $4.6 billion in trailing 12-month GMV and 3.2 million active consumers.
Klarna is also strengthening engagement beyond traditional BNPL. In the second quarter of 2026, GMV rose 18% year over year to $36.6 billion, revenues increased 27% to $1.04 billion and active consumers reached 120 million. Klarna Card also reached 6.5 million active users. These trends underscore the growing importance of consumer engagement, repeat usage and broader payment integration.
AFRM’s Price Performance, Valuation & Estimates
Shares of AFRM have risen 49.5% over the past six months compared with the industry’s 24.5% growth.
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From a valuation standpoint, AFRM trades at a forward price-to-sales ratio of 4.01 compared with the industry average of 4.76. AFRM currently carries a Value Score of D.
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The Zacks Consensus Estimate for AFRM’s 2026 earnings is pegged at $1.87 per share, followed by 53.3% growth next year.
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AFRM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
