Affirm Holdings, Inc. (NASDAQ:AFRM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Affirm Holdings, Inc. operates payment network in the United States, Canada, and internationally. The US$20b market-cap company's loss lessened since it announced a US$518m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$446m, as it approaches breakeven. As path to profitability is the topic on Affirm Holdings' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

According to the 17 industry analysts covering Affirm Holdings, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$142m in 2026. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 77% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won't go into details of Affirm Holdings' upcoming projects, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Affirm Holdings is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is 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:

This article is not intended to be a comprehensive analysis on Affirm Holdings, so if you are interested in understanding the company at a deeper level, take a look at Affirm Holdings' company page on Simply Wall St. We've also compiled a list of key aspects you should further research:

1. Valuation: What is Affirm Holdings worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Affirm Holdings is currently mispriced by the market.
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's 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.

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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.