Affirm Holdings, Inc.

Where It Passes

Where It Falls Short

• Debt & Leverage0% pass✗ 5▾

  All 4 investors flag AFRM's debt & leverage

  LT Debt / Total Assets Change19.30% -> 68.22%

  ✗PiotroskiDecreased YoY

  Total Debt / Shareholders' Equity1.78

  ✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Negative debt-to-equity (higher means less debt)-1.7833; #3712/4210 (top 88.2%)

  ✗AsnessTop 30% of eligible cross-section

  Current Assets / Current Liabilities

  ✗SchlossCurrent ratio >= 1.50x (app cutoff)
• Valuation0% pass✓ 1✗ 25▾

  No clean pass — all 12 investors flag at least one valuation criterion

  Net income / market capitalization+9.12%; #781/6340 (top 12.3%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Tangible-Book Ratio8.8x

  ✗Graham<= 1.5x

  P/E x P/TBV

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)P/E 434.1x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  Price / EPS434.1x

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)28.0x

  ✗Dreman< 8x

  Price / Tangible Book Value per Share8.8x

  ✗Dreman< 1.2x✗SchlossP/TBV <= 1.00x (app cutoff)

  Valuation ReasonablenessP/E=434.1x, OE Yield=0.4%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=434.1x, FCF Yield=2.7%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=434.1x, P/B=7.2x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share36.9x

  ✗Ackman<= 25

  Price vs. Trailing Low144% of trailing low ($45.19)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Price / Book Value per Share7.2x

  ✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Positive book equity / market capitalization+0.2606; #3877/6449 (top 60.1%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS434.1x

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.2079; #3740/5247 (top 71.3%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+3.70%; #1874/4519 (top 41.5%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+34.16%; #927/6202 (top 14.9%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Valuation models0% pass✗ 5▾

  AFRM overvalued: all 5 models price fair value below $65.11 (median $8.43)

  Graham fair value$5.51

  ✗Graham-1081.4% margin vs $65.11

  Buffett fair value$2.95

  ✗Buffett-2107.1% margin vs $65.11

  Munger fair value$32.14

  ✗Munger-102.6% margin vs $65.11

  Pabrai fair value$8.43

  ✗Pabrai-672.4% margin vs $65.11

  Ackman fair value$63.21

  ✗Ackman-3.0% margin vs $65.11
• Verdicts17% pass✓ 2✗ 10▾

  Split decision: 10 FAIL · 4 NEUTRAL · 2 PASS

  Overall verdict

  ✗GrahamFAIL (1/7)✗BuffettFAIL (1/6)✗LynchFAIL (2/4)•PiotroskiNEUTRAL (F-Score 5)✓DremanPASS (4/9)✗MungerFAIL (1/3)✗PabraiFAIL (0/3)✗AkreFAIL (1/5)✗MarksFAIL (0/4)•AckmanNEUTRAL (5/8)✗TempletonFAIL (2/8)✓SleepPASS (3/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (2/6)✗SchlossFAIL (0/7)•OshaughnessyNEUTRAL (Not ranked)
• Profitability19% pass✓ 13✗ 22▾

  13 of 16 flag AFRM's profitability — Graham, Buffett, Lynch +10 more

  Return on Equity35.0%

  ✓Munger> 15%✗AkreROE > 20% (3-year avg)

  Net income / market capitalization+9.12%; #781/6340 (top 12.3%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive EPS (10 years)1/8 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)1/8 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-20.1%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-2.7% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$85.1M

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)N/A (negative mean EPS)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)P/E 434.1x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE35.0%

  ✓Lynch> 15%

  Net Income / Total Assets0.47%

  ✓PiotroskiROA > 0

  ROA Change YoY-5.44% -> 0.47% (delta: +5.91%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=7.12%, ROA=0.47%

  ✓PiotroskiCFO/Assets > ROA

  Pre-Tax Income / Revenue13.4%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity35.0%

  ✓Dreman> 12%

  Margin of SafetyP/E=434.1x, P/TBV=8.8x

  ✗PabraiP/TBV < 1.5 or P/E < 15

  ROE (high and growing)FY2022: ROE=-38.9%; FY2023: ROE=-19.0%; FY2024: ROE=1.7%

  ✗AkreLatest 3 consecutive FYs: ROE > 15% in each

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency1/7 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue11.8%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity35.0%

  ✓Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-75.6% (2022) -> -2.7% (2024)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin -75.6% -> -2.7%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  ROE (5-year)0/5 years above 12% (latest 1.7%)

  ✗SleepROE > 12% in a majority of years

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+35.01%; #363/5226 (top 6.9%)

  ✓AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0442; #2414/5884 (top 41.0%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years1/7 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Growth25% pass✓ 5✗ 7▾

  6 of 8 flag AFRM's growth — Graham, Lynch, Dreman +3 more

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)P/E 434.1x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  EPS Growth Direction$-2.84 (2018) -> $0.15 (2024)

  ✓DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency1/7 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth38.8%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency3/5 years with positive EPS growth

  ✓AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin -75.6% -> -2.7%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR44.6%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Efficiency33% pass✓ 1✗ 2▾

  2 of 3 flag AFRM's efficiency — Akre and Sleep

  Revenue / Total Assets Change YoY0.24x -> 0.29x

  ✓PiotroskiImproved YoY

  Reinvestment Rate x ROIC1.7% (RR=100% x ROIC=1.7%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROE (5-year)0/5 years above 12% (latest 1.7%)

  ✗SleepROE > 12% in a majority of years
• Cash Flow40% pass✓ 5✗ 7▾

  6 of 10 flag AFRM's cash flow — Dreman, Pabrai, Marks +3 more

  Free Cash Flow Proxy$85.1M

  ✓BuffettPositive and growing

  FCF Positive and Growing$817.0M

  ✓LynchPositive and growing

  Operating Cash Flow$793.9M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=7.12%, ROA=0.47%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)28.0x

  ✗Dreman< 8x

  P/E or FCF YieldP/E=434.1x, FCF Yield=2.7%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive2/7 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap3.7%

  ✗Ackman>= 4%

  Price / FCF per Share36.9x

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency3/7 years positive

  ✗SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$817.0M

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+3.70%; #1874/4519 (top 41.5%)

  ✗OshaughnessyTop 10% of eligible cross-section