SAN FRANCISCO – Affirm Holdings , Inc. (NASDAQ: NASDAQ:), a payment network company with a market capitalization of $17.83 billion and impressive revenue growth of 46.55% over the last twelve months, and Liberty Mutual Investments (LMI), the investment arm of Liberty Mutual Group, have expanded their existing forward flow loan purchase program. Under the new terms, LMI will commit to purchasing installment loans from Affirm, with the potential outstanding amount reaching up to $750 million. The program, which is set to run through June 2027, could see LMI invest as much as $5 billion over time.
This expansion builds on a partnership initiated in 2019 and a forward flow loan purchase program that started in 2023. Affirm’s Chief Capital Officer, Brooke Major-Reid, expressed enthusiasm for the strengthened alliance with LMI, emphasizing the alignment with Affirm’s mission to offer honest financial products and to drive positive credit outcomes. Major-Reid highlighted the importance of deep and diverse capital sources and strong partnerships in advancing the company’s growth plans.
John Kim, managing director and head of Alternative Credit at LMI, echoed the sentiment of a solidified partnership, noting LMI’s flexible investment capabilities across the capital structure tailored to their partners’ needs.
Affirm is known for providing transparent and flexible payment options for consumers, which also creates attractive risk-adjusted assets for merchants. The company boasts a diverse funding model that includes warehouse facilities, forward flow agreements, and asset-backed securitizations. According to InvestingPro data, Affirm maintains a strong liquidity position with a current ratio of 17.58, indicating robust ability to meet short-term obligations. The stock has shown remarkable momentum, gaining over 114% in the past six months, though investors should note its high price volatility. Affirm’s funding capacity as of September 30, 2024, stood at $16.8 billion, marking over a 50% increase in the past two years. The company supports over 19 million active consumers and has generated more than $28 billion in gross merchandise volume in the year ending on September 30, 2024.
LMI manages over $100 billion in global assets, offering a broad investment platform for Liberty Mutual Group. The expansion of the loan purchase program is indicative of LMI’s commitment to long-term investment partnerships.
This development, based on a press release statement, reflects the strategic growth and capital partnership between Affirm Holdings, Inc. and Liberty Mutual Investments, aiming to enhance the availability of consumer credit options while also leveraging investment opportunities. For investors seeking deeper insights, InvestingPro offers comprehensive analysis with 10+ additional ProTips and a detailed Pro Research Report, providing valuable context about Affirm’s financial health, valuation metrics, and growth prospects among 1,400+ top US stocks.
In other recent news, Affirm Holdings has reported significant developments in its financial landscape. RBC (TSX:) Capital Markets raised the company’s stock target, reflecting a more optimistic view of Affirm’s financial prospects, backed by a strong revenue growth of 46.55% over the last year. Needham maintained its Hold rating on Affirm, analyzing whether the fintech company would benefit from acquiring a bank or applying for an Industrial Loan Company charter.
Affirm also issued $920 million in convertible notes, creating a direct financial obligation. On the partnership front, Affirm expanded its alliance with WooCommerce, integrating as a default payment option, leading to a 45% increase in WooCommerce merchants utilizing Affirm’s services.
Analyst firms including JMP Securities, Deutsche Bank (ETR:), Mizuho (NYSE:) Securities, and BTIG showed increased interest in Affirm, upgrading the company’s stock status and revising their price targets upwards. Lastly, Affirm secured a substantial capital partnership with investment firm Sixth Street, providing up to $4 billion for its loans. These are all recent developments, highlighting Affirm’s strategic growth and strong market position.
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