Investing.com --- Shares of Affirm Holdings (NASDAQ:AFRM) rose 5.2% in pre-open trade following an upgrade by BTIG analysts, who revised their rating to “buy” from “neutral”, citing the company's path toward GAAP profitability and its growing market share in point-of-sale finance.

BTIG's analysts flagged Affirm's operating income margin for fiscal 2025, which is projected to reach 19%, positioning it favorably against American Express (NYSE:AXP), whose margin stands at 20%.

They expressed confidence in Affirm's potential to surpass this target, as the company's guidance suggests room for lower expense growth.

The analysts also pointed to Affirm’s increasing take-share of point-of-sale finance, which is expected to accelerate due to macroeconomic trends, including rising credit losses for traditional credit card companies like American Express.

Affirm, which primarily offers buy-now-pay-later solutions, has seen its GMV grow at an impressive pace, benefiting from stronger merchant engagement and consumer demand.

The analysts projected 30% year-over-year GMV growth in fiscal 2025, outpacing traditional credit card lenders​.

BTIG emphasized the broader consumer finance trends that favor Affirm, noting that many credit card providers are pulling back in response to worsening credit conditions.

As a result, alternative lenders like Affirm are well-positioned to capture market share. Moreover, regulatory changes, such as the Consumer Financial Protection Bureau’s new late-fee rule, are also expected to make credit cards less attractive, potentially driving more merchants and consumers to BNPL products.

The upgrade has set a price target of $68 for Affirm’s stock, which is based on a 29.1x multiple of its projected fiscal 2025 operating earnings per share.

Analysts cited Affirm’s rapid GMV growth and its expanding margins as key drivers of its bullish outlook.

This optimism comes as Affirm continues to expand its footprint, with major retail partners like Walmart (NYSE:WMT) offering Affirm's BNPL options to their customers.

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