Affirm Holdings (AFRM) shares have been in a sharp uptrend since late March, but the derivatives market believes the fintech firm is due for a near-term pullback after earnings on Aug. 26.
Consensus is for the Nasdaq-listed firm to record $0.33 in earnings per share (EPS) for its fiscal Q4, which would represent a 65% increase on a year-over-year basis.
While Affirm stock is currently hovering around the same price at which it started 2026, it’s up a whopping 80% versus its year-to-date low.
Options Traders Forecast a Post-Earnings Dip
If Affirm comes in line with the consensus, it would have grown some 10% sequentially, which is impressive for a company of its size. Yet, it isn’t sufficient for the options market sentiment to turn green ahead of the earnings event.
The put-to-call ratio on contracts expiring Aug. 28 sits at 1.44x currently, indicating a very strong bearish skew, with the lower price signaling potential for a more than 9% decline to $70.79 within days after the quarterly release.
Investors should also note that AFRM shares have historically closed September with a 3.74% dip on average, which further dulls their appeal for the near term.
Affirm Stock Is Not Inexpensive to Own
Part of options traders' skepticism may be rooted in valuation concerns, given that Affirm shares are currently trading at a forward price-to-earnings (P/E) multiple of about 44x. This makes it significantly more expensive to own than its fintech peers like SoFi (SOFI), which currently trades for about 31x.
Plus, insiders have predominantly sold AFRM in the trailing 12 months — the optics of which are largely bearish for the company’s stock price.
The fintech firm does not currently pay a dividend to offset some of these risks tied to owning it at current levels.
What’s the Consensus Rating on AFRM Shares?
Despite the aforementioned concerns, however, Wall Street remains undeterred and continues to favor buying AFRM stock ahead of the quarterly release.
The consensus rating on Affirm Holdings sits at “Strong Buy,” with the mean price target of roughly $94 indicating potential upside of more than 20% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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