Affirm Holdings, Inc. (AFRM) Stock Valuation — PE Analysis
Financial - Credit Services · NASDAQ
Current Price
$77.03
PE Ratio (TTM)
67.0x
Intrinsic Value
$94.69
+18.6% margin of safety
COMPETITIVE MOAT
↑Merchant Network Expansion
Affirm's growing network of integrated merchants provides a key advantage. This allows more consumers to access their services at checkout, creating a virtuous cycle.
↑Brand Recognition and Trust
Affirm has built a recognizable brand associated with transparent, consumer-friendly 'buy now, pay later' options. This trust can lead to repeat usage and preference over less established competitors.
↑Data Network Effects
As more transactions occur, Affirm gathers valuable data on consumer spending habits and creditworthiness. This data can improve risk assessment and personalize offers, strengthening its competitive position.
INVESTMENT RISKS
↓Interest Rate Sensitivity
Affirm's profitability is directly tied to interest rates. Rising rates increase their cost of capital and can make their financing less attractive to consumers.
↓Credit Risk and Defaults
As a lender, Affirm faces the inherent risk of consumer defaults. Economic downturns or increased unemployment could lead to higher charge-offs.
↓Dependence on Merchant Partnerships
Affirm relies heavily on its merchant relationships for customer acquisition and transaction volume. Loss of key merchants or unfavorable partnership terms could significantly impact growth.
Base case
AFRM base case PE valuation
A base case PE valuation for AFRM estimates a fair value of about $94.69 per share, against a current price of $77.03. The model assumes 20.0% annual earnings growth, a 50x target PE multiple, and a 10% discount rate.
Intrinsic Value
$94.69
Margin of safety
+18.6%
Expected annual return
+4.2%
Base case assumptions: 20.0% annual earnings growth, 50x target PE, 10% discount rate, 5 year projection. Data as of 2026-08-21.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the AFRM PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Affirm Holdings, Inc. respond.
Open PE Calculator for AFRMCompany Overview
Affirm Holdings, Inc. provides a digital and mobile-first commerce platform that operates across the United States and Canada. This platform offers consumers a point-of-sale financing solution, delivers various tools for merchants, and includes a dedicated mobile application for users. Leveraging its payment network and partnerships with originating banks, the company enables customers to spread the cost of their purchases over time, with payment terms ranging from a single month up to forty-eight months. By June 30, 2021, approximately 29,000 merchants had integrated Affirm's services, representing a diverse array of businesses from small enterprises and large corporations to direct-to-consumer brands and traditional physical stores. These businesses span numerous industries, including sporting goods, home furnishings, travel, apparel, accessories, consumer electronics, and jewelry. Affirm was founded in 2012 and is based in San Francisco, California.
Financial Metrics — AFRM PE Stock Valuation Data
PE Ratio (TTM)
67.0x
PEG Ratio
0.03
Earnings Yield
1.47%
ROE (TTM)
11.2%
Revenue/Share (TTM)
$11.78
Debt/Equity
2.36x
Frequently Asked Questions
What is the PE ratio of AFRM?
The trailing twelve-month PE ratio of AFRM reflects how much investors pay per dollar of Affirm Holdings, Inc.'s earnings. This metric is most useful when compared to Financial - Credit Services peers and the company's own historical range.
Is AFRM overvalued based on PE ratio?
AFRM's PE of 67.0x combined with a PEG ratio of 0.03 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Financial - Credit Services, a DCF analysis may be more appropriate.
How do I value AFRM stock using PE ratio?
To value Affirm Holdings, Inc. using PE: (1) Compare the current PE (67.0x) against the Financial - Credit Services median to assess relative pricing, (2) check the PEG ratio (0.03) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of AFRM?
AFRM's PEG ratio is 0.03, calculated by dividing the PE ratio (67.0x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for AFRM stock valuation?
PE ratio gives a quick relative read — how AFRM is priced versus Financial - Credit Services peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See AFRM DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Financial Services valuationsP/E and DCF value AFRM with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.