Keep an eye on buy now, pay later (BNPL) stock, like Affirm Holdings (AFRM).

According to Bank of America analysts, now is the time to buy.

They argue that Affirm has an “achievable” plan to boost profits, and should also benefit from the Federal Reserve’s interest rate cuts.

“A lower interest rate environment would be beneficial to AFRM’s funding costs and for gain on loan sales,” the analysts said, as quoted by CNBC. “AFRM recently moved its merchants to a 36% APR cap on loans, up from 30% previously, which should remain a tailwind for yields and GMV [gross merchandise value] growth.”

Helping, earlier this month, Goldman Sachs just initiated coverage of the stock with a buy rating with a price target of $42 a share. “We view AFRM as the leading provider of modern credit solutions for consumers, with a diverse portfolio of products for point of sale financing, and everyday spending,” said the firm, as quoted by Seeking Alpha. 

Two, Americans are spending billions of dollars with BNPL – especially online.

As noted by Fortune, “U.S. consumers spent $331.6 billion shopping online in the first four months of 2024 alone, according to a report released by Adobe Analytics. That’s 7% more than a year ago, and importantly, the online spending was driven by new demand, not higher prices. Adobe’s researchers explained that e-commerce prices actually dropped 5.6% from a year ago in April. That means if their figures were inflation-adjusted, the percentage growth figure for Americans’ online spending would have been even higher.”