By Katherine Hamilton
Affirm shares fell as investors worry about sinking discretionary spending and credit use.
The stock slipped 7% to $41.13 on Thursday. Shares have lost a third of their value this year.
The platform offers buy-now-pay-later loans to consumers and is mainly concentrated in retail, which has investors worried it could struggle in the event of a recession, Susquehanna analyst James Friedman said.
"There are concerns about consumption and Affirm is subject to those concerns," Friedman said.
Higher prices from tariffs would mean the loans Affirm gives shoppers could be higher, but it might be handing out fewer of them if consumers start buying less sneakers and makeup online, Friedman said.
About 66% of Affirm's volume comes from retail and e-commerce, the company said in a presentation during its second-quarter earnings report.
Buy now, pay later hasn't been around long enough to see how it withstood other recessions, Friedman said. But debit usage usually rises, while consumers cut back on credit-card spending.
Affirm is also at risk of losing market share within its own industry after its client Walmart switched over to using Klarna as its exclusive buy-now-pay-later provider.
Write to Katherine Hamilton at katherine.hamilton@wsj.com
(END) Dow Jones Newswires
April 10, 2025 14:20 ET (18:20 GMT)
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