Max Levchin, co-founder of Paypal and chief executive officer of the Confirm financial technology company, arrives at Sun Valley Resort for the Annual Conference of Allen & Company Sun Valley, in Sun Valley, Idaho.
Drew Angerer | Getty images
Affirm The shares plunged on Friday after the Fintech company published a low forecast, and investors questioned the plan of the CEO Max Levchin to go large under 0%loans.
The purchase now, paying the lender later said that the revenues of this quarter will be between $ 815 million and $ 845 million. The middle of the range was less at the average estimate of analysts of $ 841 million, according to LSEG.
Levchin, which founded the company in 2012, tries to strengthen growth with 0%loans, a strategy which, according to him, puts consumers into the door and potentially transforms them into longtime customers. Levchin told CNBC “Squawk Box” that it was a way to retain customers, even if it means sacrificing the margins today.
“We help people understand that not paying interest, of renewable interest, is excessively a good thing,” he said. “We take credit cards actions.”
These loans now represent 13% of the total volume of gross assertions (GMV), 80% from privileged and super primary customers. The main activity of assertions consists in issuing loans to pay points of sale to consumers buying items such as clothing, electronics and sports items.
While the GMV has exceeded the estimates of analysts, affirm Income from less transaction costs (RLTC) missed the expectations of the street, partly due to the overvoltage in loan at 0%. For the quarter, the company beat the profits and generated online income with estimates.
Levchin said that despite economic uncertainty, consumers continue to spend and that the performance of the state credit remains “solid” and “consistent”.
“People are stressed by the economy, but they shop, they buy and they pay their bills-at least they reimburse their invoices on time,” he said.
With the slide on Friday, the affirmation shares are down approximately 22% for the year, while the NASDAQ is down approximately 7%.
Some analysts remain optimistic. Susquehanna, America BankAnd TD Cowen has all improved the stock or increased price objectives because of what they consider growth potential.
Goldman Sachs Maintained a purchase note on Affir, the appellant “leader in the solid category in BNPL and a winning actions compared to inherited credit providers”.
BarclaysWhich has the equivalent of a purchase note, described the quarter as a quarter as a quarter of “solid fabric” despite the high expectations of investors. The company warned that the action could see a short-term underperformance, but is optimistic about new partnerships, as a recent agreement with Costco.
Levchin highlighted the importance of playing long game.
“We needed consumers and traders and in a way the universe about a decade to understand what we are and how much we found different and important that we have found,” he told CNBC.
WATCH: Affir Holdings falls by more than 10% despite the surprise pace
