Software - Infrastructure · NASDAQ
Current Price
$63.48
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Affirm Holdings, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Affirm Holdings, Inc. operates a platform for digital and mobile-first commerce in the United States and Canada. The company's platform includes point-of-sale payment solution for consumers, merchant commerce solutions, and a consumer-focused app. Its payments network and partnership with an originating bank, enables consumers to pay for a purchase over time with terms ranging from one to forty-eight months. As of June 30, 2021, the company had approximately 29,000 merchants integrated on its platform covering small businesses, large enterprises, direct-to-consumer brands, brick-and-mortar stores, and companies. Its merchants represent a range of industries, including sporting goods and outdoors, furniture and homewares, travel, apparel, accessories, consumer electronics, and jewelry. The company was founded in 2012 and is headquartered in San Francisco, California.
ROIC (TTM)
1.7%
ROE (TTM)
8.8%
FCF Yield
2.93%
Based on trailing twelve-month data, AFRM shows a free cash flow per share of N/A and a ROIC of 1.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 2.93% are important context metrics when evaluating AFRM's stock valuation relative to peers.
The intrinsic value of AFRM depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether AFRM is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $63.48. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Affirm Holdings, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Software - Infrastructure industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting AFRM's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Affirm Holdings, Inc., this means projecting how much free cash flow the Software - Infrastructure will produce over the next 5-10 years, then discounting those amounts to today's dollars. AFRM's ROIC of 1.7% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For AFRM, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
