Sezzle Inc.SEZL
▲ PositiveTechnologyrelevance
Sezzle is leveraging AI for customer support and coding, and expanding open-loop card strategy, driving growth.
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Digital Finance & Tokenization▲ · 3 stocks
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SoFi's Bank Charter Fuels Deposit Growth as Upstart and Affirm Seek Approval
SoFi Technologies is the only one of the three major fintech lenders — SoFi, Upstart, and Affirm — that currently holds a full bank charter, giving it an internal deposit base to fund loans while its rivals still rely on third-party bank partners. SoFi obtained its charter on Jan. 18, 2022, by acquiring the small California bank Golden Pacific and applying through it, and has since grown deposits from $1.2 billion in first-quarter 2022 to $45.5 billion in second-quarter 2026, with members rising from 3.9 million to 15.8 million and products from 5.9 million to 24.4 million over the same period. The company swung from a net loss of $110 million, or -$0.14 per share, four years ago to net income of $156 million, or $0.12 per share, in Q2 2026. Upstart received conditional approval for a national bank charter in July and is expected to get final approval in early 2027, while buy now, pay later provider Affirm applied for an industrial loan bank charter in January and has not yet been granted any approvals. SoFi stock is down about 36% year to date and trades at 34 times earnings and 21 times forward earnings, after returns of 116% in 2023, 54% in 2024, and 70% in 2025.
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Goldman Sachs Raises Affirm Price Target to $115 on Improving Fundamentals
Goldman Sachs raised its price target on Affirm Holdings to $115 from $106 on September 12, citing improving underlying fundamentals. The hike followed Affirm's fourth-quarter fiscal 2026 results, in which revenues surged 33% to $1.2 billion and operating income rose $89 million to $147 million. Interest income climbed 35% in the quarter, in line with a 33% increase in average net loans held for investment partners, and 80% of Affirm's direct-to-consumer product loans carried interest at quarter-end. Affirm Card active cardholders more than doubled to 5.2 million, driving a 124% increase in Card GMV to $2.8 billion, while management estimated GMV would reach $64 billion in fiscal 2027 with an adjusted operating margin of 30.5%. Wolfe Research analyst Darrin Peller upgraded the stock to Outperform with a $90 price target, though the company continues to face credit-quality and competitive risks as banks, fintechs, retailers and payment networks expand installment-payment offerings.
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Affirm Launches AI Underwriting Model, Sees 3.4% More Completed Purchases
Affirm Holdings is launching a new transformer-based machine learning model for real-time credit underwriting at U.S. checkouts, drawing on 14 years of its own transaction and repayment data to analyze the order and timing of events across a consumer's credit history. In initial testing, the model approved applications the previous system would have declined, including consumers with limited credit histories and no FICO scores, and those incremental approvals produced 3.4% more completed purchases than the control group, with the loans performing better than a comparable expansion under the previous model. Affirm says the model is built to deliver fast and explainable decisions, and the release does not provide a dollar estimate of the financial impact. The company frames the launch as expanding approvals without simply lowering credit standards, with the financial benefit depending on how the early results scale. Affirm shares have risen 58.2% over the past six months compared with the industry's 20.2% growth, and the stock trades at a forward price-to-sales ratio of 4.1X versus the industry average of 4.2X.