5 Best Young Stocks to Buy Now

3. Affirm Holdings, Inc. (NASDAQ:AFRM)

Number of Hedge Fund Holders: 27      

Affirm Holdings, Inc. (NASDAQ:AFRM) operates a platform for digital and mobile-first commerce in the United States, Canada, and internationally. It is one of the premier IPO stocks to invest in. On September 22, the firm announced that it had extended their services on Amazon by introducing a new payment option of pay over time for the customers in Canada. This option will provide flexibility and transparency for customers. 

On September 7, Morgan Stanley analyst James Faucette maintained an Overweight rating on Affirm Holdings, Inc. (NASDAQ:AFRM) stock and lowered the price target to $53 from $80, noting the choppy near-term credit performance of the firm. 

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Affirm Holdings, Inc. (NASDAQ:AFRM), with 4.1 million shares worth more than $74 billion.  

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Affirm Holdings, Inc. (NASDAQ:AFRM) was one of them. Here is what the fund said:

“We recently covered our short position in Affirm Holdings, Inc. (NASDAQ:AFRM) after a rapid decline brought the share price to ~$30 – down from our entry point above $100 – in only 7 months. We discussed Affirm in our Q4 letter, saying the following:

Affirm is a “Buy Now, Pay Later” (BNPL) company founded by former PayPal CTO and cofounder Max Levchin. They provide installment loans to consumers, partnering with retail companies looking to drive higher sales. They have two primary products: a zero-fee installment loan for consumers with the best credit scores, and a more traditional product with 20%+ interest rates for subprime borrowers. Their stated plan is to disrupt the credit industry with more transparent, lower-fee loans. At a roughly $28b market cap at the start of 2022, AFRM stock was priced at more than 20x trailing sales, a steep price for a money-losing lender. While their early lead in online BNPL transactions and partnerships with fast-growing retailers like Peloton has fueled significant historical growth, a wave of competition has arrived… While the stock has already fallen sharply from where we initiated our short position, we think it could fall another ~40% to trade at 8x FY2022 sales.”