Is Affirm Holdings, Inc. overvalued or undervalued?

As of 28 August 2025, the valuation grade for Affirm Holdings, Inc. has moved from risky to attractive, indicating a significant improvement in its investment appeal. The company appears to be overvalued, given its high P/E ratio of 152, a Price to Book Value of 6.61, and an EV to EBITDA of 36.28, which are considerably higher than its peers. For instance, Synchrony Financial, which is categorized as very attractive, has a P/E of 15.06 and an EV to EBITDA of 2.68, highlighting the disparity in valuation metrics.
In terms of performance, Affirm has outperformed the S&P 500 across multiple time frames, with a remarkable 1-year return of 103.05% compared to the S&P 500's 17.14%. This strong performance may reflect investor optimism, but the elevated valuation ratios suggest that the stock may be priced for perfection, warranting caution for potential investors.