We feel now is a pretty good time to analyse Affirm Holdings, Inc.'s (NASDAQ:AFRM) business as it appears the company may be on the cusp of a considerable accomplishment. Affirm Holdings, Inc. operates payment network in the United States, Canada, and internationally. The US$14b market-cap company announced a latest loss of US$518m on 30 June 2024 for its most recent financial year result. As path to profitability is the topic on Affirm Holdings' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Consensus from 17 of the American Diversified Financial analysts is that Affirm Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$43m in 2026. Therefore, the company is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 81% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Affirm Holdings' growth isn't the focus of this broad overview, but, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there's one issue worth mentioning. Affirm Holdings currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn't exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Affirm Holdings which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Affirm Holdings, take a look at Affirm Holdings' company page on Simply Wall St. We've also put together a list of important aspects you should further examine:

1. Historical Track Record: What has Affirm Holdings' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Affirm Holdings' board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.