The company just posted strong earnings that included a top and bottom-line beat, but despite the news, the shares fell 2.7% by the close.
Levchin explained that Affirm is a lot more than just a payments' company. They're a technology company, he said, and that means they can build custom payment solutions for their partners.
Levchin added that customers love using Affirm because they're a great alternative to credit cards.
When asked about life after the pandemic, Levchin noted that travel has been a big focus for the company and Affirm is primed to take advantage of the return of travel. Buying tickets with Affirm is already very popular.
Let's check on the charts of AFRM.
In the daily Japanese candlestick chart of AFRM, below, we can see a bearish picture. Prices are in a downtrend and trading below the declining 20-day and 50-day moving average lines. The On-Balance-Volume (OBV) line has been in a decline telling us that sellers of AFRM have been more aggressive.
The 12-day price momentum study shows a low in early March and a higher low now even though prices have made lower lows. This difference in movement is a bearish divergence and tells us that the pace of the decline has slowed. Typically, a downtrend slows because someone is buying into weakness -- this is what investors do when they find a company that is "undervalued."
In this daily Point and Figure chart of AFRM, below, we can see a potential downside price target in the $27 area.
Bottom-line strategy: We need to see more bottoming price action and a reversal in the OBV line before recommending purchase of AFRM.