Now is not the time to buy into buy now, pay later company Affirm , according to Wedbush. Analyst David Chiaverini initiated Affirm with an underperform rating and a price target of $15 per share, implying downside of nearly 40% from Tuesday’s close. “We’re concerned about Affirm’s path to GAAP profitability, increasing competition in the buy now, pay later (BNPL) space, industry forecasts calling for slowing e-commerce sales (which drive Affirm’s gross merchandise volume, or GMV), and its ability to cover its cost of capital as funding costs increase,” Chiaverini wrote in a note Tuesday. Affirm went public in January 2021 as consumers, loaded with extra cash from various government stimulus packages, ramped up spending. The company’s public market debut also coincided with a sharp rebound in US economic activity after the Covid-19 pandemic onset. This, combined with historically low interest rates and unprecedented monetary stimulus from the Federal Reserve, sent the stock up more than 100% in its first year. This year has been a different story, however. Affirm shares are down more than 75% this year and are trading more than 86% below a high set early November, as the economy slows and the Fed raises rates to fend off a sharp increase in inflation. “A recession could lead to an increase in unemployment, which could have negative impacts on consumer demand and credit metrics,” the analyst said, adding that Affirm has “not yet had to take much action in response to the rising rate environment. … Looking out over the longer term (1 year plus), Affirm may have to take some action on the fee/consumer APR side of the business to remain competitive.” Chiaverini also said Affirm could face pressure from increasing competition in the buy now, pay later space, “with traditional consumer finance companies introducing their own point-of-sale and post-sale installment lending products.” Not to mention a new formidable competitor that was revealed this week. “Apple also recently announced its own pay-in-four product which dials up the competitive threat,” the analyst wrote. “Affirm’s pay-in-four product, which was 20% of GMV in the most recent quarter and is the fastest growing segment, is becoming especially commoditized with margins getting squeezed and bigger merchants pushing a hard bargain on economics.” —CNBC’s Michael Bloom contributed to this report.