We value AFRM based on EV to Gross Profit and consider our FY27 estimate. Our target price of $100 implies 11.8x FY27 gross profit estimates representing a premium for its very strong growth outlook and improving profitability profile.

AFRM is rated High Risk for sensitivity surrounding its consumer credit exposure and sentiment, macroeconomic volatility, and reliance on external funding.  

Risks to our target price include: Broader economic weakness and more specific consumer weakness, interest rate risk, earnings volatility, and regulatory risk.