The Afterpay Ltd (ASX: APT) share price seems unstoppable right now.
People have been calling Afterpay overpriced since before its share price even cracked double digits. That was still the case at $20 per share, $40 per share, $50 per share.
As it stands, the buy now, pay later company's shares are trading at around $68 per share. That's an impressive growth trajectory given it only listed in June 2017.
However, there's one major hurdle facing ASX shares right now: the August earnings season.
Let's take a look at what we can expect from Afterpay in its upcoming announcement.
What to expect from Afterpay's full-year result?
Let's do a quick recap before we look to the future. Afterpay's last trading update was on July 7 and contained some impressive numbers.
Underlying sales came in at $11.1 billion for FY20, up 112% on the prior corresponding period.
The industry leader expects merchant revenue margins for FY20 to be in line or better than 1H FY20 and FY19.
Net transaction loss, a key metric for risk and default losses, is expected to be up 55 basis points for FY20.
Net transaction margin, a profitability measure, is expected to be "approximately 2%" while earnings before interest, tax, depreciation and amortisation is forecast to be $20 – $25 million.
Overall, these are some strong numbers from Afterpay. The release of that trading update earlier this month has taken some of the guesswork out of next month's full-year result.
Since that announcement, the Afterpay share price has edged 0.8% higher. That says to me that despite strong growth expectations, Afterpay is continuing to match or exceed them.
So, where can we expect the Afterpay share price to finish in 2020?
Where will the Afterpay share price finish the year?
This is a really tough question to answer. I don't think many in the market thought we would see the Afterpay share price hit over $75 per share let alone amid the coronavirus pandemic.
Yet here we are. I certainly wouldn't be willing to bet against the company's growth this year.
If Afterpay posts strong numbers and demonstrates consistently low loss and default rates, I think we could see the Afterpay share price break its current 52-week high.
My 'base case' scenario has me thinking Afterpay shares will hover roughly between $60 to $80 for the rest of the year.
I think the big factors from here are unemployment levels, company loss rates and success of international expansion plans.
If Afterpay and the economy can tick those boxes, I think we could see the Afterpay share price edge towards $100 next year.
