Affirm Holdings Inc (NASDAQ:AFRM) Shows High-Growth Momentum and Bullish Technical Setup

For investors looking to join solid fundamental momentum with good technical entry points, a multi-factor screening method can be a useful instrument. This method centers on finding companies that are not only showing quickening earnings and sales growth—a sign of high-growth momentum investing—but are also in a positive technical state, giving a possible entry arrangement. By sorting for stocks with high marks in ChartMill’s own High Growth Momentum (HGM), Technical (TA), and Setup Quality ratings, the aim is to locate securities where solid business performance matches a price chart indicating a likely extension of the upward move.

AFFIRM HOLDINGS INC (NASDAQ:AFRM) appears from such a screen, offering a strong case for this joined method. The company, which runs a digital and mobile-first commerce platform, displays the sort of rapid fundamental momentum that growth investors look for.

Fundamental Growth Momentum

The heart of the high-growth momentum view for Affirm depends on its outstanding recent financial results, especially in profitability. The HGM rating combines several important growth and momentum measures, and Affirm’s basic data is good.

• Rapid Earnings Growth: The company’s earnings per share (EPS) growth on a trailing twelve-month (TTM) basis is at a notable 147%. Even more notable is the quarter-over-quarter momentum. The latest quarter saw EPS jump 174% against the same period last year, after earlier quarters of growth at 243% and 102%.
• Steady Revenue Growth: Top-line growth stays solid, with TTM revenue higher by 37%. Recent quarterly sales growth has regularly been over 30%, showing continued demand for its payment solutions.
• Profitability Turn: A key point for momentum investors is not only growth, but widening profitability. Affirm’s profit margin in the last reported quarter was 8.65%, a major gain from 0.36% two quarters before, indicating a strong shift toward lasting earnings.
• Positive Surprises and Revisions: The company has exceeded EPS estimates in each of the past four quarters, with an average surprise of 144%. Also, analysts have changed their earnings estimates for the next year higher by more than 13% in the past three months, showing increasing belief in its short-term outlook.

This mix of high growth rates, margin improvement, and positive estimate changes is exactly what the HGM rating is made to identify, making Affirm a leading choice for growth-focused investors.

Technical Strength and Setup Quality

While good fundamentals give the "why" to invest, technical analysis can aid with the "when." According to the detailed technical report, Affirm’s chart shows features that match its fundamental story.

The stock gets a good Technical Rating of 7, backed by several positive points:

• Both its long-term and short-term trends are scored as positive.
• It is priced above important moving averages (20, 50, 100, and 200-day), which are all in an upward arrangement.
• It does better than 71% of stocks in its Financial Services industry, showing comparative strength.

Maybe more important for timing an entry, the stock has a Setup Rating of 7. The analysis states that "prices have been consolidating lately and the volatility has been reduced." This consolidation, after a time of increase, can form a base from which the next upward phase may start. The report finds a clear resistance area just above the present price (around $75.64 to $77.46), suggesting a possible breakout point. The existence of set support areas below gives a structure for handling risk.

A Merging Opportunity

In summary, Affirm Holdings shows a merging of factors wanted by growth and momentum investors. Fundamentally, it is showing the sort of quickening, high-margin growth that pushes continued stock performance. Technically, it is in a confirmed uptrend and is now forming a consolidation pattern that could give a planned entry point. This match is the main goal of a method that sorts for high HGM, TA, and Setup ratings—it tries to find companies where the engine of business momentum is good and the vehicle (the stock chart) is placed to possibly benefit from it.

For investors wanting to find other securities that meet these conditions of high growth momentum paired with positive technical setups, more results can be seen by using the High Growth Momentum Breakout Setups screen.

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Disclaimer: This article is for information only and does not form financial advice, a suggestion, or an offer or request to buy or sell any securities. The analysis is based on given data and should not be the only ground for an investment choice. Investors should do their own study and think about their personal financial situation before making any investment.