Payment shares have dominated the ASX best performers this year, smashing the 'old school' tech darlings in the WAAAX club by quite a substantial margin. Names like FlexiGroup Limited (ASX: FXL), Zip Co Ltd (ASX: Z1P), Afterpay Touch Group Ltd (ASX: APT) and Splitit Ltd (ASX: SPT) – or 'FZAS' – have all recorded big gains in 2019 so far, although some of these have since dropped off as well. Lets take a look at how the FZAS stocks are faring today.
Afterpay
Afterpay shares have substantially recovered aver the last two weeks, after dropping on news the company was being audited by the Australian Transaction Reports and Analysis Centre (AUSTRAC) over money laundering allegations. Afterpay shares are back above the $27 mark this morning, up an extraordinary 34% in 10 days. Afterpay continues to dazzle with these rises, showing (in my opinion) just how frothy the share price is at these levels.
Splitit
Splitit shares have certainly been on a bumpy rise YTD so far. After topping out at $2 a share in March, Splitit has now fallen back to $0.69 per share. The company has lost some of its shine after only posting revenues of around US $320,000 while running at a $2.5 million loss in 2019 so far. The company is still very young, only floating in January of this year (and IPO investors are still up big), but if Splitit can't show some marked improvements in its top and bottom lines, I personally don't see the SPT shares going back up, in the short-term at least.
FlexiGroup
FlexiGroup shares are still up for the year, but today's price of $1.58 is still a long way off the near-$2 mark the shares were pushing in May and even further away from FlexiGroup's 52-week high of $2.34. The company's flagship payments product humm has been turning heads with a reported 17% foothold in the buy-now, pay-later (BNPL) space. humm has enlisted retailers like JB Hi-Fi Limited (ASX: JBH) so is showing promise, but I am still wary of whether humm can compete with Afterpay in the long-run.
Zip Co
Zip has certainly got investors' attention in 2019 so far, with Zip shares tripling in value YTD so far. Zip Co started 2019 at around $1.10 but in May hit the $3.88 mark, and has since dropped back to around $3.16 today. But still, Zip shareholders would be a very happy bunch. Zip has impressed with its numbers, boasting a 20% increase in revenue over the most recent quarter to around $23 million and adding around 140,000 new customers to its platform during this time. Zip is emerging as the main competitor to Afterpay and seems to be successfully carving out its own niche in the market.
Foolish takeaway
There is definitely still good money to be made (in my opinion) with BNPL stocks. Although valuations are getting to dangerous levels, particularly with Afterpay, if you understand the market and the companies, payments remain a lucrative area to be invested in.
