This buy now pay later firm has a modest short-term growth outlook. Bank of America says shares could surge anyway

Affirm Holdings is likely to continue rallying thanks to several potential catalysts, even as the buy now, pay later fintech company just issued a modest forecast for near-term growth, according to Bank of America.

The bank has a buy rating on San Francisco-based Affirm, and raised its 12-month price target on the stock to $104 from $93, suggesting 34% upside from Thursday's close.

"Affirm is layering optionality on top of a conservative core algorithm," analyst Matthew O'Neill wrote Friday in a note to clients. "Our broader takeaway is that Affirm's core [buy now, pay later] and card growth algorithm, already tracking ahead of a guide management describes as a floor, is being supplemented by a set of growth vectors that remain entirely unmodeled."

Affirm reported fiscal fourth-quarter results on Thursday, beating Wall Street expectations. The stock is up about 13% in early premarket trading Friday. The company said expects revenue for the current quarter to total between $1.19 billion and $1.22 billion, more than the $1.16 billion estimated by analysts polled by FactSet.

Over the next year, Affirm's potential to secure a bank charter and brand-sponsored promotions could serve as catalysts to push the stock higher, Bank of America said.

AFRM YTD mountain Affirm is up 4% year to date but has soared 65% in the past six months "We see multiple avenues for the [fiscal 2027] algorithm to prove out ahead of plan, consistent with the pattern of conservative guidance and consistent beats management has established since going public," O'Neill wrote.

Bank of America's call matches the consensus on the Street, where 26 of 35 analysts rate Affirm a buy or strong buy, LSEG data shows. Shares are up 4% in 2026 but have soared 65% in the six months.