Confirmation of rising stocks with jumps in revenues. Credit quality is steadfast.

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Confirms

Shares of holdings popped up in after-hours trading after buy now, pay later, as the company reported a 22% jump in revenue in its fiscal fourth quarter.

Shares rose more than 12% after Thursday’s close. Investors seemed encouraged as Affirm (Ticker: AFRM) maintained its momentum even as concerns mounted about a slowing economy and weak consumer credit.

“Fiscal 23 has been a huge test, and I am very proud of how the team has delivered to shareholders, venture capital partners, merchants and consumers,” CEO Max Levchin said in a letter to shareholders. “Macroeconomic headwinds continue and more challenges are sure to come, but I believe we have demonstrated that Affirm has the talent and grit to tackle them.”

For the quarter ended June 30, Affirm lost $206 million, or 69 cents a share, on revenue of $446 million. The consensus among analysts surveyed by FactSet was for a loss of 88 cents per share on revenue of $406 million. In the year-ago quarter, Affirm reported a loss of 65 cents per share on revenue of $364 million.

That confirmed shares are up 42% this year even as analysts cool off the stock. Only 25% of analyst surveys conducted by FactSet have a buy rating of the stock, 50% of the stock have a hold rating, and 25% have a sell rating.

Sentiment was bearish because Affirm’s business model had not been tested in an environment like the current one, with concerns about recession, rising financing costs and consumers being pressured by inflation and rising interest rates.

So far, Affirm seems to be holding up pretty well. Its financing capacity increased by $300 million compared to the end of the previous quarter, to reach $11.7 billion. The lender also said the share of credit overdue for 30 days or more fell 0.3 percentage point to 2.3%, excluding purchases of Peloton equipment and its product paid in four.

Affirm has long maintained that it has a better handle on credit scores than credit card issuers because it gets their approvals at the transaction level and adjusts credit terms accordingly, while banks and other card providers issue lines of credit that consumers can use for anything.

For the first fiscal quarter of 2024, Affirm expects revenue in the range of $430 million to $455 million. The total cargo volume is expected to range between $5.3 billion and $5.6 billion.

Write to Carleton English at carleton.english@dowjones.com