The Afterpay Ltd (ASX: APT) share price has been the most resilient among its buy now, pay later (BNPL) peers. Could the recent strength in the Afterpay share price make it a buy at today's price?
Afterpay share price finding its footing
The Afterpay share price has found its footing around the $75 mark despite this month's highly volatile trading sessions. The broad tech sell off in the United States market clawed back its losses on Monday and could be the start of a much needed reversal. I believe Afterpay's tenacity is a good sign for its shares moving forward.
Are the banks or Paypal a threat?
The Australian Financial Review outlined the concerns that Paypal Holdings Inc (NASDAQ: PYPL) could slow Afterpay's growth in the US. Paypal charges merchants significantly less for sales with a product that is very similar to Afterpay.
The Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd. (ASX: NAB) both launched no interest credit cards to combat BNPL products. CommBank Neo and NAB's StraightUp card provide customers with up to $3,000 of credit with no interest payments, no late payments and no foreign currency fees but with a fixed, monthly fee. These products are nothing new and, from a cost perspective, much more expensive than BNPL products.
COVID-19 tailwinds
COVID-19 has accelerated structural shifts in consumer behaviour and preferences that align with Afterpay's business model. The increase in e-commerce and online sales is not only good for its business model, but also helps position the company as a platform for retailers, rather than a standalone form of credit.
Global expansion
The path to global dominance continues for Afterpay as it announced plans to launch in Canada in August 2020. Furthermore, Afterpay has made an agreement to acquire 'Pagantis' to launch in Spain, France and Italy with regulatory approval to also operate in Portugal. These four countries have an addressable e-commerce market worth more than $247 billion. The acquisition will hit the ground running with a fully staffed and experienced team, existing multi-lingual technology stack and IP and a pathway to access other EU member states.
Afterpay also intends on leveraging its Tencent Holdings relationship to explore opportunities in Asia. It has currently made a small acquisition of a Singapore-based company operating in Indonesia.
Foolish takeaway
It's good to see the Afterpay share price settle and ignore the noise of the broader market. There could be good news coming out of the company in the near term to confirm its expansions and acquisitions, which could give the share price a much needed push. With that said, the general market is still looking very weak and more volatility is to be expected following soaring COVID-19 cases in Europe as well as the impending US election.
