| By Andy Swan It’s not even Halloween and the annual American holiday spending spree has already begun. According to the National Retail Federation (NRF), 45% of holiday shoppers plan to buy before November – kicking off what’s expected to be another record year of spending. 
Source: National A new study by Talker Research found that 68% of consumers expect to spend the same or more than they did in 2023. But with inflation forcing many middle- and lower-income households to be more budget-conscious, 53% of those shoppers plan to lean on flexible payment options that allow them to pay for those holiday gifts over time. Now, it used to be that whenever someone didn’t have the means to pay for expensive items in one lump sum, they had the option to put them on layaway. That need didn’t just disappear. But the solution evolved in a massive way. The Modern-Day Layaway Buy Now, Pay Later, or BNPL, is kind of like the modern-day version of layaway: offering consumers a way to buy items they need now and pay them off over time. It works like a short-term loan, typically without interest and may not require or penalize credit scores (unless payments are late or nonexistent) – good news for folks with dodgy or no credit. BNPL has become an attractive option for Americans looking to avoid concerns with credit cards like paying interest, maxing out credit, or being unable to get approved. This trend is especially popular among the younger tech-savvy generations. An estimated 33.6 million millennials are taking advantage of BNPL services in 2024: 
Source: eMarketer And business is booming. Of the nearly $222 billion spent online last holiday season, consumers spent $16.6 billion using BNPL, according to data from Adobe Analytics – reflecting a 14% jump from the year prior. Whether or not a retailer offers BNPL factors into spending decisions more than you may think. More than half (54%) of American consumers look for retailers that offer a BNPL option. The opportunity is clear. And for our money, there’s one name that’s best positioned in the BNPL market today. It’s leading in market share, besting competitors in growth, and meeting consumers where they are, offering its BNPL services online through one of the world’s largest digital ecosystems and in-store through the world’s leading retailer. We’ll let you in on that pick today – before the 2024 holiday spending season starts in earnest. The Clear BNPL Leader The BNPL leader I’m talking about is Affirm Holdings (AFRM), which offers numerous advantages to consumers, including lower interest rates, 0% promotional rates, transparent services, no hidden fees, secure transactions, and no late fees. Affirm utilizes AI-driven technology to increase efficiency across its rapidly expanding consumer base and provide unique and personal offerings to its customers. Last December, Walmart (WMT) added Affirm’s platform to self-checkout kiosks at over 4,500 U.S. stores, giving it that in-store retail presence I mentioned earlier. As you well know, Walmart is a powerhouse of retail sales. Affirm was also one of the first of BNPL companies to launch a physical card, the Affirm Card, which is similar to a debit card but allows consumers to turn transactions into BNPL loans. Time named it one of “Best Inventions of 2024.” 
Adoption is on the rise. Last quarter, Affirm’s total transactions surged an impressive 42% year over year to 24.7 million. Better yet, the majority of Affirm users are repeat customers – approximately 60% come back to make a second transaction within 12 months. Since then, Affirm upped its exposure significantly, launching a key partnership with Apple Wallet (AAPL) in September that’s only just getting started. 
Source: investors.affirm.com This strategic team-up connects Affirm to an estimated 60.2 million Apple Pay users in the U.S., giving them the option to leverage its BNPL services while tapping into the single most popular method for e-commerce payments – digital wallets. Just in time for the holiday season. 
Clearly, Affirm is one to watch. But the story gets even more exciting. A Profit Opportunity in the Making Our data reveals a potential opportunity ahead of Affirm’s next earnings event on November 7. LikeFolio’s company-level website metrics show Affirm gaining a massive edge over the competition; U.S. monthly visitors are up as much as 30% year over year: 
This growth rate is double that of its next-closest BNPL competitor, Klarna, and particularly impressive considering Affirm already is the overwhelming market share leader in the U.S., according to consumer web traffic. Last quarter, AFRM beat expectations on both its top and bottom line, with revenue growing 48% year over year to $659 million. It also closed the gap toward breaking even: earnings of negative 14 cents per share marked a significant turnaround from the negative 69 cents per share from a year ago. While the company is not yet profitable, Affirm’s CEO, PayPal (PYPL) co-founder Max Levchin, cited more transactions as the path to reaching profitability goals. With the continued growth in consumers and transactions noted last quarter and LikeFolio’s bullish web data, Affirm is likely heading in the right direction. Affirm shares soared following its last positive report in August, helped along by falling interest rates and the announcement of its partnership with Apple. Still, the stock is down ~4% year to date… 
Source: TradingView Creating the potential for another burst higher. Traders looking for the best way to play Affirm’s earnings next week will find our recommendation in this Sunday’s Earnings Season Pass Scorecard. (Here’s how you can make sure you’re on the list.) We’ll be watching Affirm’s November 7 report closely to see if it can continue to bring in significant growth and narrow the gap towards profitability. If so, it could be a compelling long-term bet to the upside. Until next time,  Andy Swan
Founder, LikeFolio Countdown to the Vote: The Investor’s Guide to the 2024 Election 🗳 Elections create chaos in the markets – and the 2024 vote could be the most consequential in history. Anxiety is high with just five days left until Election Day. Here are our best resources for turning election chaos into profits… ✓ Trump vs. Harris Watchlist: Understand which stocks could benefit from proposed policy changes under either a Trump or Harris administration with our top eight picks. Get them here. ✓ The Day After the Election: Most folks aren’t thinking about what happens the day AFTER the election. But a “chaos convergence” of two events could send markets reeling. Here’s how to prepare. ✓ 3 Sectors Ready to Rally: While we don’t know the outcome of Tuesday’s vote, we do know these three sectors are ripe for growth, regardless of who ends up in office. Check it out. | 
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