Afterpay share price: One key growth statistic you may have missed
‘APT’s US app downloads in Mar-2021 were >3x the amount in Mar-2020, and were even above the Dec-2020 seasonal peak.’
Afterpay share price ↑
Markets seem to have trouble staying pessimistic for too long.
After trading around the $100 handle in late March, Afterpay has seen its share price rebound firmly. In fact, from its 1-month low, the stock is up close to 20%, opening Wednesday’s session at $119.40 per share.
Mind you, while the share prices of these companies have been pretty volatile, the fundamentals haven’t changed in that period. Reality may be no different, but the market seems to be a shade more accommodating right now.
As we’ve discussed consistently in the last few months, investors have grown increasingly skittish around the prospect of rising interest rates and inflation. This has seen a relatively well defined rotation from high-growth, high multiple stocks, into more ‘sensible’ value names.
As IG Market Analyst Kyle Rodda pointed out:
‘Although the world remains an uncertain place and risks to the markets are present, just for the here and now, market participants appear to be taking it in their stride.’
A few pretty crazy things have happened in between, too – the Archegos saga for one. Blowing up your $10 billion fund is one thing, almost taking down your prime brokers is another thing entirely. Credit Suisse apparently lost close to $5 billion on the trades gone bad.
But back to Afterpay…
With no new data from the company itself, investors are typically faced with the prospect of having to fill in the gaps themselves.
In this case, Morgan Stanley has turned to Bloomberg and Sensor Tower to get a better picture of Afterpay’s US app download performance.
Here’s what Morgan Stanley said about Afterpay:
‘APT’s US app downloads in Mar-2021 were >3x the amount in Mar-2020, and were even above the Dec-2020 seasonal peak. This suggests APT's platform in the US may be expanding more rapidly than we expect. Coupled with its recent entry into the EU, APT appears on track to build a global BNPL platform.’
Overall, Morgan Stanley remains bullish on Afterpay, reiterating their $159 price target and Overweight rating. That’s not quite as confident as they were before, mind you. In Mid-February MS analysts ratcheted up their price target on APT to $170. As investors fled the sector on mass, they lowered that price target.
Key risks to the downside include: slower revenue growth, weaker discretionary spending, ‘Rising bad debts amid macro downturn’ and an adverse change in the regulatory environment.
Trade ASX-listed stocks long and short with IG today.
Create an IG trading account or log in to your existing account to get started now.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.