Affirm Holdings, Inc. AFRM recently announced an expansion of its partnership with Alterra Mountain Company. This deal will enable Affirm to access all destinations of Alterra in the United States and Canada. The partnership allows the company to provide flexible and transparent payment options, like buy now pay later, to customers looking to book Ikon and mountain passes, lessons and lodging at Alterra’s destinations. Hence, this would boost Affirm’s transaction volumes.

AFRM’s business model of not charging any late or hidden charges further enhances its offerings. The deal comes at an opportune time for AFRM as demand for flexible payment options in travel booking is rapidly increasing. Eligible travelers can divide the total cost into monthly payments for an APR of as low as 0%. Customers never have to pay more than what they agreed upfront. Providing affordable and transparent travel alternatives poses AFRM’s revenues well for growth.

This initiative bodes well for AFRM as it expects to achieve a medium-term target of $50 billion in GMV by expanding the reach of its merchant network and card internationally. Deepening adoption of AFRM’s cards through a rising number of partnerships should help the company improve its profit margins in the future.

AFRM’s recent cohort is spending at a higher annual spend rate compared with the year-ago quarter, highlighting improved engagement and continued innovation in offerings. AFRM’s adjusted operating income margin improved 1,600 basis points in the fiscal third quarter of 2024. Its number of active merchants grew 19% year over year to 292,000.

Price Performance

Over the past year, shares of Affirm have surged 96% against the 8.1% decline of the industry.

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Zacks Rank & Other Key Picks

Affirm currently has a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the Business Services space are SPX Technologies, Inc. SPXC, CRA International, Inc. CRAI and Barrett Business Services, Inc. BBSI. While SPX Technologies sports a Zacks Rank #1 (Strong Buy), CRA International and Barrett Business Services carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The bottom line of SPX Technologies outpaced estimates in three of the last four quarters and matched the mark once, the average beat being 13.9%. The Zacks Consensus Estimate for SPXC’s 2024 earnings suggests an improvement of 24.4% from the 2023 reported figure. The consensus mark for revenues suggests growth of 14.7% from the 2023 figure. The consensus mark for SPXC’s 2024 earnings has moved 2.3% north in the past 30 days.

Charles River’s earnings outpaced estimates in three of the trailing four quarters and missed the mark once, the average surprise being 19.1%. The Zacks Consensus Estimate for CRAI’s 2024 earnings suggests an improvement of 13.4% from the 2023 reported figure. The consensus mark for revenues suggests growth of 6.8% from the 2023 figure. The consensus mark for CRAI’s 2024 earnings has moved 3.3% north in the past 30 days.

The bottom line of Barrett Business Services outpaced estimates in each of the last four quarters, the average beat being 38.6%. The Zacks Consensus Estimate for BBSI’s 2024 earnings suggests an improvement of 7.6% from the 2023 reported figure. The same for revenues suggests growth of 7% from the 2023 number. The consensus mark for BBSI’s 2024 earnings has moved 2.2% north in the past 60 days.

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