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Cramer Bets Big on Affirm: Real Growth, Real CEO
23 Aug
Summary
- Cramer praises Affirm CEO, calling him brilliant.
- Affirm stock is a Cramer favorite, predicted to hit $100.
- Affirm faces scrutiny over valuation compared to rivals.
Jim Cramer has repeatedly expressed strong confidence in Affirm Holdings, Inc. (NASDAQ:AFRM), a buy now, pay later provider. He lauded the firm's CEO, Max Levchin, calling him brilliant and predicting the stock would reach $100. As of August 17th, Cramer stated Affirm was the only stock he would buy at that moment, citing its real growth and the CEO's capability.
The company's shares have experienced some volatility, down 3% in the past year but up 4% year-to-date, with a recent closing price of $77. Analysts debate Affirm's valuation, noting its forward P/E ratio of 39.84 is significantly higher than competitors like JPMorgan and PayPal.
Affirm projects strong annual growth in gross merchandise volume (GMV) at 35%, revenue less transaction costs at 41%, and active customers at 22%. The firm leverages point-of-sale algorithmic data to mitigate defaults.
However, Affirm's business is susceptible to economic conditions, including consumer spending, interest rates, and inflation. Additionally, its reliance on private credit markets introduces funding cost complexities. The article also briefly mentions Salesforce Inc. (NYSE:CRM), noting its year-to-date share decline and the ongoing debate around its AI business segment.
