Affirm Holdings stock jumped roughly 6% on September 2 after Scotiabank initiated coverage with a Sector Outperform rating and a $95 price target. The stock was trading around $74.17, up from a prior price of $73.11.

Affirm Holdings, Inc. (AFRM)

Scotiabank’s main argument is that the market is valuing Affirm like a cyclical, funding-sensitive lender, when the company is increasingly operating like a capital-light payments network.

That distinction is important because capital-light networks typically receive higher valuations than traditional lenders, and Scotiabank said Affirm belongs in that category.

Gross merchandise volume is growing at scale, and the bank said more incremental dollars are flowing through to operating income. That kind of operating leverage is often viewed favorably by investors, especially as the company’s mix shifts toward products that can deepen engagement beyond a single transaction.

The Affirm Card is central to that case. Scotiabank said it is shifting volume toward higher-frequency, direct consumer spending and reducing Affirm’s dependence on any single merchant partner.

The card also gives Affirm broader spending data, which should improve underwriting over time. Better data can support better credit decisions, which is especially important for a company in this business.

Funding Stack and Credit Health

On the funding side, Affirm has expanded committed capacity, improved its asset-backed securities execution, and reduced the amount of its own equity used to finance its platform portfolio.

Credit remains the main risk, but Scotiabank said recent vintage data indicates losses are controlled and adequately reserved for. That is an important reassurance for investors who have been cautious about credit quality, since lending models in this space are closely watched for signs of stress in consumer repayment behavior.

Warrant and stock-based compensation drag are also fading, which should make earnings look cleaner going forward. Management is targeting $100 billion in annual gross merchandise volume and higher margins.

Revenue grew 32% year over year over the last twelve months, and the company has reached GAAP profitability. That marks an important milestone for Affirm as it continues trying to show that scale can translate into more durable earnings.

Analyst Price Targets Move Higher

Scotiabank is not the only firm that has grown more positive. Several other analysts have recently raised their price targets after Affirm’s strong fourth-quarter results.

Cantor Fitzgerald raised its target to $97, while Bernstein SocGen Group increased its target to $110. TD Cowen set a target of $124, citing a substantial earnings per share beat that was partly helped by a tax benefit.

BMO Capital raised its target to $101 with an Outperform rating. Cantor Fitzgerald also reiterated an Overweight rating at $88.

Affirm’s fourth-quarter report beat expectations on both revenue and earnings, with fiscal 2027 guidance calling for gross merchandise volume of $64 billion and revenue at roughly 8.49% of GMV.

The broad analyst consensus currently sees about 43% upside potential from recent price levels. Year to date, however, the stock is still down about 6%.