The Afterpay Ltd (ASX: APT) share price has hit a new, all time high of $76.98 before edging back to its current price of $76.05. This takes its gains since March to just under 765%. The high flying buy now, pay later (BNPL) provider is knocking on the door of the S&P/ASX 20 (ASX: XTL) with a market capitalisation of more than $21 billion. Investors are pushing the Afterpay share price higher ahead of the release of the company's full year results on Thursday 27 August.
How has Afterpay been performing?
Afterpay has seen significant growth in volumes and customer numbers since the start of the pandemic. The adoption of online shopping has been accelerated by lockdowns and store closures, while the economic downturn has increased focus on budgeting. Afterpay's solution is leveraged to both these shifts. Where customers use Afterpay's solution, Afterpay pays the merchant for customer purchases (minus merchant fees) effectively lending customers the purchase price. Customers then pay Afterpay back over equal interest-free installments.
BNPL customers boom
Afterpay has seen a boom in customer numbers in 2020. The BNPL provider reported 9.9 million customers across the United States, United Kingdom, Australia and New Zealand at the end of June. This was a 116% increase year on year. Other BNPL providers have seen similar increases in customer numbers – competitor Zip Co Ltd (ASX: Z1P) reported a 63% increase in customers in F20, with 2.1 million customers at 30 June.
BNPL share prices have followed customer numbers upward. Although the sector was heavily sold off in March, investors quickly realised its resilience and bought back in. The Afterpay share price fell 78% from a February high of $40.50 to a March low of $8.90. But by May, the Afterpay share price was trading above its previous high and has continued to climb ever since.
Transaction volumes surging
Afterpay is gaining customers at a record rate, and those customers are spending – transaction volumes processed using Afterpay's platform surged 127% in Q4 to $3.8 billion. This brought full year underlying sales to $11.1 billion, up 112% on FY19. Other BNPL providers such as Sezzle Inc (ASX: SZL) and Openpay Group Ltd (ASX: OPY) have also seen sales volumes surge. Sezzle reported a 57.5% increase in underlying sales in the June quarter while Openpay saw a 119% increase in the same quarter.
Afterpay share price continues soaring
The Afterpay share price has hit yet another all time high today as the BNPL sector goes from strength to strength. Consumers were increasingly turning to BNPL solutions even prior to the pandemic. This shift has now accelerated, sending the Afterpay share price to new highs.
