The Afterpay Ltd (ASX: APT) share price is on watch as the buy-now, pay-later (BNPL) group is within touching distance of another milestone.
Why you should watch the Afterpay share price today
The Afterpay share price closed at $37 per share on Friday and is up a whopping 26.37% in January. The BNPL leader's shares are now up 2,746.15% from its $1.30 per share IPO price in May 2016.
Afterpay is now within touching distance of a new milestone on the S&P/ASX 200 (INDEXASX: XJO) this week. The group boasts a market capitalisation of $9.72 billion as at Friday's close – just shy of the $10 billion mark.
The Aussie BNPL group should move into the ASX 50 on the next S&P rebalancing of the index. That would cap a stunning rise to ASX 200 stardom for the group in a hugely successful 2-year period for the Afterpay share price.
Afterpay has hit a number of milestones and now takes merchant fees from billions in sales each year. It has transformed itself into an ASX 200 heavyweight in an incredibly short amount of time.
At this rate, Afterpay could climb into the ASX 20 by the end of the year. Suncorp Group Ltd (ASX: SUN) and Insurance Australia Group Ltd (ASX: IAG) are currently the smallest companies in that index.
Both of those Financials groups boast market caps around the $16 billion mark. Assuming that remains unchanged, the Afterpay share price would have to climb to about $60 per share in 2020. Given the BNPL provider's shares are worth 5 times what they were in January 2018, I don't think that mark is too far out of reach.
Is there still time to buy in 2020?
It's easy to look at the Afterpay share price and say that it is overvalued at $37 per share. However, there has been talk of how pricey the stock is since its very early days.
Strong merchant sales and a steady expansion have underpinned the recent share price growth. Just as I wouldn't bet against CSL Limited (ASX: CSL) shares climbing higher despite astronomical growth, I think Afterpay could smash the $10 billion barrier and move into the ASX 20 this year.
