The Afterpay Ltd (ASX: APT) share price has hit yet another all-time high today, breaching the $62 mark for the first time ever and printing a new record at $62.33.
It's been a truly incredible run for Afterpay shares over the past 3 months. Exactly 3 months and 1 day ago, Afterpay had just closed at $8.90 per share. Today, any investors who were lucky enough to pick up the company's shares at that time would be sitting on a 600% gain as at this morning's new high watermark. Not bad for 3 months work.
Why the Afterpay share price is hitting the roof today
Afterpay has been in investors' good books ever since the company revealed that use of its platform has exploded during the coronavirus pandemic and associated economic shutdowns. When the COVID-19 crisis began, investors initially feared the buy now, pay later (BNPL) leader would be swamped with a wave of defaults and credit crunches. Exactly the opposite has occurred, which has resulted in Afterpay's massive market re-rating over the past 3 months.
But Afterpay's share price is now far above the levels it was commanding even before the coronavirus pandemic hit. So what's new?
Well, this morning the company announced that Clearpay (Afterpay's United Kingdom business) now has over 1 million active customers after just one year in the market. It also told us that its new UK customers are using the BNPL platform more than 8 times per year on average. That compares very well with the 6 times per year its United States customers were using Afterpay in its first year of American operations.
Still time to buy Afterpay shares?
No doubt there will be investors (this writer included) watching the Afterpay share price's performance with just a twinge of FOMO (fear of missing out). But is there still a case for a buy today, given the stock's recent run?
Well, it depends on your outlook for this company. Right now, Afterpay is being valued at approximately $16.1 billion. If you think Afterpay has what it takes to go up against the behemoths in this space – US companies like Visa, Mastercard and American Express – then its shares are still cheap. Remember, Visa has a market capitalisation of approximately US$421.5 billion, Mastercard US$308 billion and Amex US$80 billion.
Having said that, there is still a big 'if'. Conversely, if you're not that confident, then perhaps the current Afterpay share price isn't one you should be buying into. It's still very hard in my view to value Afterpay as it's not yet profitable. So keep that in mind when you're looking at its current share price. Afterpay has also displayed significant volatility in the past, so you might still get a chance to buy in when the company isn't at record highs.
But at the end of the day, it's your call.
