Affirm Holdings stock appears overvalued by roughly 12.5% based on the Excess Returns model, which estimates an intrinsic value of about $75 per share compared to the current market price. The model assumes a stable earnings power of $3.82 per share on a book value of $19.24 per share, implying a return on equity of 19.86%, and deducts a cost of equity of $1.48 per share to arrive at an excess return of $2.34 per share. Affirm's price-to-earnings ratio of 74.1 times also sits well above the diversified financial industry average of 15.7 times and a tailored fair multiple of 28.3 times, reflecting stretched valuations. Recent enthusiasm around a funding deal with CPP Investments and banking charter plans has pushed the share price ahead of what these valuation frameworks support, raising the bar for future earnings and credit performance.
Affirm Holdings IncExcess Returns model estimates intrinsic value ~$75, 12.5% below current price, and P/E of 74.1x far exceeds industry average, indicating overvaluation.