Affirm Holdings (NASDAQ:AFRM) was the relative leader among buy now, pay later stocks in September, declining 10.5% to $69.61. Klarna Group (NYSE:KLAR) fell 12.5% to $12.42, while Sezzle (NASDAQ:SEZL) dropped 13.2% to $107.64.
All three names underperformed the Financial Select Sector SPDR ETF (NYSE ARCA:XLF), which dropped 7.9% in the month, while the SPDR S&P 500 ETF Trust (NYSE ARCA:SPY) held roughly flat with a 0.3% decline.
Affirm Was the Relative Winner
Affirm limited its September loss to 10.5%, outperforming Klarna and Sezzle. Nevertheless, the stock lagged the XLF ETF, indicating that BNPL shares faced headwinds beyond broad financial-sector weakness.
Affirm’s core business centers on installment-payment products distributed through merchant relationships and consumer checkout flows. Results hinge on transaction volume, merchant growth, funding costs, credit performance, consumer spending, and adoption of installment financing.
The smaller decline suggests investors view Affirm as relatively well positioned, though the negative return reflects ongoing caution around valuation, credit risk, and sensitivity to shifting economic conditions.
Klarna Faced Post-Listing Pressure
Klarna stock fell 12.5% to $12.42, trailing Affirm but slightly outperforming Sezzle. The decline was notable as Klarna traded below the broader financial-sector benchmark by several percentage points.
Klarna operates a global payments and shopping platform offering installment financing and other consumer-payment options. Growth depends on consumer engagement, merchant relationships, transaction activity, credit outcomes, and the ability to convert scale into sustainable profitability.
Recently listed companies often experience sharp moves as investors establish views on valuation, competitive positioning, and long-term financial potential. Klarna’s retreat may partly reflect that price-discovery process during a month of broad financial-stock retreat.
Sezzle Posted the Largest Decline
Sezzle stock fell 13.2% to $107.64, recording the largest loss of the group and underperforming both Affirm and Klarna as well as the XLF ETF.
Sezzle provides installment-payment solutions competing in the same consumer-finance category as Affirm and Klarna. Shares can swing sharply as investors assess merchant growth, transaction trends, consumer-credit performance, and competition from larger payments companies.
The wider decline does not determine Sezzle’s long-term prospects, but it indicates investors assigned a lower near-term value to Sezzle’s outlook relative to Affirm and Klarna.
Affirm Took a Narrow Lead. So, What’s Next?
Affirm’s lead was purely relative, as all three BNPL stocks underperformed the XLF ETF, which itself lagged the SPY ETF significantly. The result points to overlapping pressures: broad weakness in financial-sector equities and concentrated caution toward consumer-finance platforms.
Investors will likely focus on loan performance, funding costs, merchant and user growth, transaction volume, and each company’s path toward sustained profitability.
Affirm, Klarna, and Sezzle could diverge on earnings reports or outlook updates. Investors should consider keeping position sizes modest, as BNPL stocks remain especially sensitive to credit conditions, consumer trends, and changing valuation expectations.