Affirm Holdings, a pay-later company, has witnessed a surge in its stock value, causing divided opinions among Wall Street analysts regarding its future prospects. Despite concerns about consumer financial strain, Affirm remains optimistic, as reflected in its latest earnings report.

Revenue Growth and Delinquency Rates

Mizuho Securities analyst Dan Dolev emphasizes Affirm's ability to achieve revenue growth while simultaneously reducing delinquency rates. Dolev maintains a Buy rating with a target price of $20, attributing Affirm's success to increased customer engagement and the popularity of the Affirm Card, which adds 75,000 cardholders on a monthly basis.

Federal Student Loan Payments

Amid expectations of federal student loan payment resumptions this fall, Affirm expects only a modest impact on its borrowers. Company executives confirm that this projection is reflected in their guidance. However, BTIG analyst Lance Jessurun expresses concern, suggesting that the company should adopt a more conservative approach due to potential losses and higher provision expenses resulting from payment resumptions.

Intensified Competition and Future Outlook

Affirm has faced intensified competition from Apple's introduction of its own buy now, pay later service. Despite this, Affirm CEO Max Levchin reassures analysts that the company remains the leading underwriter in the sector. Wedbush analyst David Chiaverini, however, advises caution due to competition, rising funding costs, and a slowdown in e-commerce spending.

In summary, while some analysts remain bullish on Affirm's future prospects, others urge caution due to various factors impacting the company's performance.

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