: Affirm stock sinks after BTIG makes bearish call, seeing room for 40% downside

Shares of Affirm Holdings Inc. AFRM were losing 8% in Wednesday’s session after BTIG analyst Lance Jessurun initiated coverage of the buy-now-pay-later operator’s stock with a sell rating and $10 target price. “Our biggest concern is the pace at which expenses are outpacing revenue growth,” he wrote in his note to clients. More generally, he sees Affirm’s business model as pressured given that rising rates are negatively affecting costs of funding. “In an environment where scale and profitability are top of mind, we believe it’s difficult to justify Affirm’s premium valuation to peers,” he wrote. His $10 target implies more than 40% downside from current levels, even while factoring in Wednesday’s intraday slide. Jessurun was more upbeat about shares of SoFi Technologies Inc. SOFI and Upstart Holdings Inc. UPST, among others.

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