According to Morgan Stanley, it’s time to move on Affirm after its disappointing earnings results this week. Analyst James Faucette downgraded the online payments stock from overweight to equal weight, saying the scope of Affirm’s offerings is too narrow. He also cut his price target to $15 per share from $46 per share. The new target implies a growth of over 12%. “BNPL [Buy Now, Pay Later] “Funding can be an excellent way to give younger consumers and those with limited credit histories access to credit purchases, and the structure of Affirm’s BNPL helps to instill behavior and repayment discipline,” Faucette wrote in a Friday note. However, by limiting its offering to BNPL and developing products that have significantly different features (eg Debit+) than those widely adopted by the market (ie revolving credit), the challenges of customer education and adoption increase Affirm shares fell more than 3% in the premarket on Friday. AFRM 1D mounts AFRM falls Affirm announced Wednesday it is slashing 19% of its workforce, following CEO Max Levchin said in a message to employees that the firm “intentionally hired ahead of the revenue needed to support the size of the team” early in the pandemic. However, he added that “everything could change in mid-2022”. Because rising interest rates and slowing consumer spending raised Affirm’s bore costs. Due. Levchin wrote, “The fundamental reason we are where we are today is because I acted very slowly as these macroeconomic changes unfolded.” Come.” What’s more, Confirmation focused on both the top and bottom lines in its second-quarter earnings report. Remembered the expectations of the writer. “We think Affirm’s broad ambitions limit its potential, compounded in the near term by the adverse drag of the bad credit cycle and the need to build in new pricing ranges and interest rate ceilings,” Faucette wrote. “We think a better, more efficient strategy would be to use BNPL to attract customers for initial transactions and then transition the best customers into traditional credit products (such as credit cards) as soon as practicable. have to carry, and then use incentives such as modified credit lines and incentives.” universal acceptance encouraging increased engagement,” he said. Affirmed shares have come under increasing pressure since the company’s initial public offering in January 2021. It ended its first year on the Nasdaq trading at $100.56. However, in 2022 The stock fell 90% in 2017. It has since rebounded somewhat, up 37% in 2023. Affirm did not immediately respond to CNBC’s request for comment. —CNBC’s Michael Bloom and Lauren Fenner contributed to this report.