Affirm $AFRM has garnered the attention of investors, in large part due to its revenue growth, but multiple tailwinds have not helped the bottom line. the stock is priced for the firm to take huge amounts of market share and become the largest BNPL firm in the world. See thread.
While Affirm may have been one of the first modern BNPL firms in the United States to gain attention, its position atop the industry didn’t last long. In 4Q18, Affirm made up 78% of all app downloads for BNPL providers. In 1Q21, Affirm made up just 16% of all BNPL app downloads.
As Affirm’s share of the U.S. market fades, its gross merchandise volume (GMV), a measure of total sales facilitated by Affirm’s BNPL service, of $8 billion remains well below Klarna, at $70 billion, and Afterpay (recently acquired by Square [$SQ]), at $21 billion.