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“Google Trends search data for AFRM’s Debit+ (a hybrid pay now, BNPL debit card) is promising,” they commented. “In our view, the uptick in Debit+ searches is reminiscent of the ‘buzz’ that engulfed Square’s Cash Card in its early days (2017).”
As a result, the analysts raised their price target to $20 from $17, suggesting 35% upside from Monday’s closing price.
They highlight that the recently launched Debit+ card is a debit card that allows customers to utilize pay now and pay over time at the point of sale in conjunction with the Affirm app.
“In our view, Debit+ is innovative as it expands where consumers can use AFRM: online, offline, and in electronic wallets,” the analysts commented.
Analyzing Google Trends shows an ample increase in interest level in Debit+ since March 2023, they note.
“The ‘buzz’ surrounding Debit+ is reminiscent of the boost in searches that engulfed Square’s Cash Card in its early days (2017),” the analysts added. “Since then, SQ’s Cash Card saw about ~150% gross profit CAGR, reaching ~20mn MAUs and a ~$1bn GP run-rate as of 1Q23.”
Mizuho analysts see the potential for ~250% volume CAGR from Debit+ through FY26. They said this can drive up total GMV CAGR from about 20-25% to about 30-35% with a boost to RLTC from mid-20%s close to 30%.
