(Reuters) – Shares in Confirm holdings (NASDAQ:) rose 7% on Monday, breaking a 6-day losing streak after Goldman Sachs upgraded its rating to “buy” and raised its price target, citing the fintech company’s competitive underwriting relative to peers and “well-managed credit results” despite faster growth.
Goldman analyst Will Nance took over coverage of the payments and credit services provider and began by upgrading the company from previous analyst Michael Ng’s “neutral” rating and raising his 12-month price target to $42 from $21. Shares last traded at $32.
Nance said short-term accounts receivable and “transaction-level underwriting” allow Affirm to “segregate and separately underwrite different types of individual customer spend,” such as debit spending, cash flow management, short-term financing and long-term installment financing from a single card. – product based.
This can be compared to the historical trend towards single revolving lines of credit from card issuers, which Nance said carry much higher costs for the consumer borrower and a much higher level of risk for the lender.
Affirm has an average price target of $39.53, according to LSEG data, which shows 17 analysts cover the company.
Affirm ratings from Wall Street analysts range from 1 “strong sell”, 2 “sell”, 9 “hold” and 5 “buy”.
Affirm shares are down about 35% year to date, compared with a gain of about 17% for .
(This story has been corrected to reflect that the new price target is $42, not $42.50 as stated in paragraph 2).