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Affirm Holdings (NASDAQ:AFRM) shares are trading lower on Wednesday afternoon, caught in a broader market downdraft after the Federal Reserve’s latest policy announcement. Here’s what investors need to know.
What To Know: While the Fed cut its benchmark interest rate by 25 basis points to a range of 3.75%-4% and paused its balance sheet runoff, comments from Chair Jerome Powell injected a heavy dose of uncertainty into the market.
Powell noted that another rate cut in December is “not a foregone conclusion,” highlighting “strongly differing views” on the committee. This more hawkish tone rattled investors.
For a “Buy Now, Pay Later” provider like Affirm, the prospect of interest rates remaining elevated is a significant headwind. The company’s business model is sensitive to interest rates, as higher borrowing costs can squeeze its profit margins and potentially dampen consumer demand for its loan services. The uncertainty surrounding future Fed policy creates risk for growth-oriented financial technology stocks.
Investors now look ahead to Affirm’s quarterly earnings report next week. The company is set to release its financials on Nov. 6, with Wall Street analysts expecting an earnings per share of 41 cents on revenue of $884.02 million.
Benzinga Edge Rankings: According to Benzinga Edge proprietary stock rankings, Affirm boasts an exceptional Growth score of 98.44 but scores very low on Value at just 4.57.
AFRM Price Action: Affirm Holdings shares were down 3.64% at $73.15 at the time of publication on Wednesday, according to Benzinga Pro data.
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Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, Affirm Holdings is in the Financials sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
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Posted In: AFRM
