Scotiabank Challenges Wall Street Valuation of Affirm (AFRM)

Shares of Affirm (AFRM) surged about 6% on September 2 after Scotiabank initiated coverage with a Sector Outperform rating and $95 price target.

The bank's analysts contend that Wall Street incorrectly values Affirm as a cyclical lending business instead of a capital-efficient payments platform.

Affirm's gross merchandise volume continues to expand at significant scale, with improved conversion to operating profit.

Scotiabank highlights that the company's payment network operates similarly to traditional payment networks, which typically receive premium valuations compared to conventional lending operations.

The Affirm Card is driving transaction volume towards more frequent consumer-initiated purchases while diversifying away from merchant partner concentration risk.