Wall Street Executes Affirm Shares After Company Misses Revenue Guidance By A Hair, -14%...

Affirm has officially been KO’d. Shares cratered 14% after its earnings showing yesterday, not because the numbers were radioactive by any means… but because their big headed CFO opened his mouth and said the quiet part out loud: growth is slowing. That’s it. Just one sentence uttered, and instantly, Affirm gets kneecapped in extended trading. 

(Source: Giphy) 

In short, Affirm reported Q3 revenue of $783 million, right in line. Gross merchandise volume? $8.6 billion, up 36% year over year. Bigly… like a cocaine line on a Bloomberg terminal kind of big. Meanwhile, the “by now, pay later” frenzy is still catching waves with Affirm active users topping 21.9 million, up 23%. But again, none of that ended up mattering. Because while Wall Street wanted Q4 revenue guidance to be $843.9 million… Affirm clapped back with somewhere between $815 and $845 million. Meaning, they missed the midpoint by about the cost of a Costco hot dog, and the market reacted like Affirm just announced it was pivoting into fax machines.

Speaking of Costco, Affirm actually signed a deal with them this quarter. So you’d think partnering with one of the most recession-tolerant, cash-gushing retailers on the planet would buy you a little breathing room. Nah. Wall Street didn’t care jack sh*t about it. Because if Affirm wasn’t promising 200% growth and a 10x multiple in five minutes, the company was pretty much dead on arrival. 

(Source: Stocktwits) 

What’s more, is that CEO Max Levchin went on CNBC to drop us all this gem: “People are stressed out about the economy yet they're shopping, they're buying, and they're paying their bills—at least they're paying their bills back to us on time.” If you didn’t already know what Affirm stood for already, now you do. The company is basically a high-interest IOU machine, and the only reason it hasn’t imploded is because broke people are still delusional enough to finance AirPods.

On the EPS side, Affirm beat by a penny. Wall Street was expecting a loss, so giving them one cent of profit wasn’t enough to keep shares from getting executed in broad daylight. Why? Because again, Affirm’s CFO spoke the truth. And the truth is that growth was hot in April, but it won’t end up staying that way most likely. But in this market, Wall Street spits on realism. It wants to hallucinations. It’s not about good or bad anymore. It’s about the performance. It’s about pretending you’re building the future while quietly praying the consumers you’ve buried in installment debt don’t default all at once.

(Source: Giphy) 

So yeah, in the end, while investors were crying into their bags yesterday… At least we know why everything went south. Affirm didn’t miss, that’s the good news. The bad news is that they just didn’t lie hard enough. And they got punished for it. Of course, for those who inject risk into their bloodstream, this may be a nice “BTFD” opportunity heading into next week. But still, this falling knife may have more momentum going for it. 

Meaning, keep your eyes on Affirm, and place your bets accordingly, friends. It’ll be interesting to see if, and when shares will bounce back. Until next time… 

P.S. Oh, I’m sorry, I didn’t know you liked getting rekt. Let’s face it, retail investors get the short end of the stick all day everyday. It’s the smart money’s world, and we are just living in it–only useful when it comes to liquidity purposes in the market. Meaning, if you’re as pissed off as I was when I found out Milli Vanilli was lip syncing the whole time, then it’s time to go from investing blind, to investing smart. Luckily for you, the key is right here as a Stocks.News premium member. Click here to see exactly how our premium members are printing while others quake in the face of today’s market chaos. 

Stocks.News does not hold positions in companies mentioned in the article.