Affirm Holdings, Inc. (AFRM) Stock Valuation — PE Analysis
Software - Infrastructure · NASDAQ
Current Price
$66.17
PE Ratio (TTM)
58.3x
Intrinsic Value
$94.69
+30.1% margin of safety
COMPETITIVE MOAT
↑Merchant Network Growth
Affirm's expanding network of merchants accepting its 'Buy Now, Pay Later' (BNPL) solutions creates a sticky ecosystem. This network effect makes it harder for competitors to replicate their reach and customer base.
↑Data Advantage
The company's proprietary data on consumer spending and repayment behavior provides a competitive edge. This data informs risk assessment and product development, leading to better underwriting and customer experiences.
↑Capital Partnership Strength
The renewed and expanded partnership with CPP Investments, supporting significant loan volume, demonstrates strong access to capital. This reduces reliance on volatile funding markets and supports scalable growth.
INVESTMENT RISKS
↓Regulatory Scrutiny
The BNPL industry faces increasing regulatory attention regarding consumer protection and lending practices. New regulations could impact Affirm's business model and profitability.
↓Intense Competition
The BNPL market is highly competitive with established players and new entrants. Affirm must continuously innovate and maintain strong merchant relationships to retain market share.
↓Credit Risk Management
Affirm's core business relies on extending credit, making it susceptible to economic downturns and rising default rates. Effective credit risk management is crucial for long-term sustainability.
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 $66.17. 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
+30.1%
Expected annual return
+7.4%
Base case assumptions: 20.0% annual earnings growth, 50x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
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)
58.3x
PEG Ratio
0.03
Earnings Yield
1.71%
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 Software - Infrastructure peers and the company's own historical range.
Is AFRM overvalued based on PE ratio?
AFRM's PE of 58.3x combined with a PEG ratio of 0.03 provides a growth-adjusted perspective. A PEG below 1.0 suggests AFRM may be undervalued relative to its earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Software - Infrastructure, 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 (58.3x) against the Software - Infrastructure 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 (58.3x) by the expected earnings growth rate. A PEG below 1.0 is traditionally considered a sign of undervaluation — the market may not be fully pricing in the growth potential. 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 Software - Infrastructure 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 Technology 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 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.