A Cheap Way to Trade the Buy Now, Pay Later Boom

Weakness in Affirm Holdings (SYM: AFRM) is an opportunity.

All as buy now, pay later payment options become far more popular. In fact, BNPL has become the second-largest used form of credit among U.S. consumers, according to Nerd Wallet.

Credit cards are the most commonly used form of credit, with 66% of respondents using them in the past 12 months. Meanwhile, 25% said they had used BNPL services in the last 12 months, they added. “As staple items, such as groceries, remain expensive, and borrowing costs are still high, some shoppers are turning to BNPL to pay for essentials, such as personal care items. About 8% of adults in the NerdWallet survey said they used BNPL for necessities.”

That’s all good news for stocks, like Affirm Holdings, which was recently upgraded to an overweight rating by JPMorgan, with a price target of $43.

The firm added that the decline following stronger-than-expected earnings and a better-than-feared fiscal Q4 gross merchandise volume outlook “was baffling.” However, they believe AFRM only fell in sympathy with Shopify’s recent negative news on growth and margins.

Technically, while AFRM has been trending lower these last few months, give it time. With the BNPL story still. Heating up, we’d like to see AFRM initially retest $40 from its last traded price of $29.57 near term.

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