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Afterpay share price: 2021 interim results preview

We look at some of the key things investors should be aware of before the BNPL juggernaut reports its interim results this week.

When will Afterpay report its interim results?

Afterpay Limited (APT) is set to hand down its interim FY21 results this Thursday, 25 February.

The company is set to hold a live audio webcast concerning the results on the same day, with investors set to be given the chance to ask questions during that presentation.

Growth expectations remain elevated

The market is expecting big things from Afterpay. Trading at 75x sales, the stock is one of the most expensive large-caps on the ASX. This comes as the company continues to notch up impressive sales results, growing revenue at a rapid click.

While the Bloomberg consensus for Afterpay’s interim revenue results currently stands at $373 million, some analysts expect it to come in well above that.

For example, Morgans analysts recently said ‘We forecast 1H21 revenue of A$473m […] and 1H21 NPAT of A$5m (Bloomberg consensus of A$21m).’

While analysts at Morgan Stanley have a slightly lower H1 revenue target -- $462 million – the broker remains one of the most bullish in Australia, pinning a $170.1 price target on APT.

While Morgan Stanley analysts concede that APT's valuation is 'demanding', the broker argues that 'we think revenue growth will continue, in view of strong app downloads and peer cross read’, pointing out this will allow the company to 'build out its ecosystem to prolong growth.'

With Afterpay still only boasting a small product range, Morgan Stanley analysts see room for expansion. Citing Afterpay's recently announced partnership with Westpac as an example, it was noted that while 'We think making revenues from deposits is tough, particularly given low rates. But APT will gain customer data, and repayments via savings accounts could reduce the ~110bp processing costs.’

Looking at the consensus data, 64% of analysts are Overweight APT, 29% are Equal-Weight and 7% are Underweight.

Afterpay share price performance compared

In step with that heady valuation and expectations of strong revenue growth, APT has proven to be a star performer over the last year, with the stock up over 300% in that period.

Mind you, bullish share price action has been a theme across the entire BNPL complex. Over the last year Sezzle (SZL) is up more than 500%, while Zip is up approximately 250% – at the time of writing.

The Afterpay share price opened at $152.35 on Monday, 22 February 2021.

Want to learn more? We discuss another broker’s view – namely Bell Potter’s $168 price target on the stock – in more depth here


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