Wall Street isn't buying Affirm now

Shares of Affirm tumbled Thursday after the “buy now, pay later” company reported a weaker-than-expected outlook that underlined an “uncertain macroeconomic backdrop.” Affirm’s stock, which gained about 3% in regular trades, plunged 13% after hours.

The company reported a loss of 65 cents a share, which was wider than the consensus estimate of 59 cents a share. Affirm posted revenue of $364.1 million, beating Wall Street’s expectation of $354.8 million.

But Affirm said that for the current quarter, the company expects revenue of $345 million to $365 million, weaker than Wall Street’s expectation of $386 million.

“In light of the uncertain macroeconomic backdrop, we are approaching our next fiscal year prudently while maintaining our focus on driving responsible growth and continuing to invest in strengthening our leadership position,” Chief Financial Officer Michael Linford said in a statement.

Affirm’s outlook will likely highlight growing concern about the impact of the economic downturn on consumer spending and on the "buy now, pay later" market which the company pioneered.

CEO Max Levchin has argued that Affirm is in a good position to weather the storm because "buy now, pay later" offers “more cash-flow flexibility” compared to credit cards, which the company considers its main competitor.

Levchin reaffirmed that belief on Thursday as he noted how “the growth of online commerce is falling back to pre-COVID levels.”

“The secular trend toward adopting honest financial products is gaining momentum,” he said in a statement. “Not only does this make our mission more important but it also plays directly into Affirm's strengths.”

Affirm also highlighted key gains. The company said its total number of active consumers jumped 96% year-over-year to 14 million. The number of transactions per active consumer also rose 31% to three.

Affirm’s gross merchandise volume, which measures the total value of its sales, climbed 77% to $4.4 billion.