Investing.com — Stocks Confirm shares (NASDAQ:) rose 5.2% in pre-market trading after being upgraded by BTIG analysts, who upgraded their rating to “buy” from “neutral,” citing the company’s path toward GAAP profitability and growing market share in points sales finance.

BTIG analysts noted Affirm’s fiscal 2025 operating profit margin is forecast to be 19%, putting it in a favorable position compared to American Express (NYSE:), which has a margin of 20%.

They expressed confidence in Affirm’s potential to exceed this target as the company’s guidance suggests there is room for lower cost growth.

Analysts also noted Affirm’s growing share of point-of-sale financing, which is expected to accelerate due to macroeconomic trends, including rising credit losses at conventional credit card issuers such as American Express.

Affirm, which primarily offers buy now, pay later solutions, has seen impressive GMV growth, benefiting from greater seller engagement and consumer demand.

Analysts predicted 30% year-over-year GMV growth in fiscal 2025, outperforming conventional credit card lenders.

BTIG highlighted broader trends in consumer finance that favor Affirm, noting that many credit card providers are pulling back in response to deteriorating credit conditions.

As a result, alternative lenders like Affirm are well-positioned to gain market share. Moreover, regulatory changes such as the Consumer Financial Protection Bureau’s modern slow fee rule are also expected to make credit cards less attractive, potentially encouraging more merchants and consumers to exploit BNPL products.

The update established a price target of $68 per share for Affirm, which is based on 29.1 times expected fiscal 2025 operating earnings per share.

Analysts cited Affirm’s rapid GMV growth and expanding margins as the main factors driving Affirm’s earnings growth.

This optimism comes as Affirm continues to expand its reach, with major retail partners such as Walmart (NYSE:) offering Affirm’s BNPL options to their customers.