Is it $80 or $100 next for the Afterpay (ASX:APT) share price? 

Could the Afterpay Ltd (ASX: APT) share price surpass $100 or will it take a breather after running 23% this month? We take a closer look.

afterpay share price volatility represented by one green arrow pointing up and a red arrow pointing down

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The Afterpay Ltd (ASX: APT) share price has defied gravity and set a new record all-time high of $98.68 this morning. With its share price chart looking almost vertical in recent months, what's next for the Afterpay share price? 

A tech share bull market? 

The broader tech market has been running strong with the Nasdaq Composite (NASDAQ: .IXIC) eyeing previous record all-time highs set in September. Back at home, the S&P/ASX 200 Index (ASX: XJO) finally broke out of its COVID-19 induced trading range between 5725 and 6200 in intraday trading yesterday. The strength in the ASX 200 has seen the S&P/ASX All Technology Index (ASX: XTX) deliver a 1-month return of 20% and 5-day return of 10%. Clearly the recent strength in the broader market and tech shares has supported the Afterpay share price run. However, give Afterpay an inch and it'll take a mile. 

Broad BNPL run 

The Afterpay share price has run almost 23% in October, at the time of writing. However, it isn't an outlier as there has been a broad appreciation in buy now, pay later (BNPL) share prices in October. 

  • Zip Co Ltd (ASX: Z1P) share price up around 22% 
  • Openpay Group Ltd (ASX: OPY) share price up around 9% 
  • Sezzle Inc (ASX: SZL) share price up around 18% 
  • Splitit Payments Ltd (ASX: SPT) share price up around 12% 
  • Laybuy Group Holdings Ltd (ASX: LBY) share price up around 16% 

I believe Afterpay and Zip are clear leaders in the BNPL sector. As such, I am avoiding other players which I believe have exhibited inferior share price performance, despite appearing 'cheaper' or 'playing catch up'. Nonetheless, the BNPL sector appears to have put the fears regarding Paypal Holdings Inc (NASDAQ: PYPL) and increased competition from players such as the big 4 banks behind it. 

What's next for the Afterpay share price? 

Personally, I believe the Afterpay share price has largely had its run and without additional announcements or a push from the broader market, is likely to pullback from current prices. Afterpay typically holds its AGM in mid-November at which it will likely update the market with its transaction volumes, geographic expansions and/or partnerships. Investors should look out for details such as: 

  • Transaction/revenue growth and any potential impacts due to competition/Paypal 
  • Update for its North America expansion into Canada in August 2020 
  • Acquisition of Pagantis to launch in Spain, France and Italy with regulatory approval to also operate in Portugal 
  • First step in Asia with its small acquisition of a Singaporean-based company operating in Indonesia (EmpatKali) 
  • Potential opportunities leveraging its Tencent Holding Ltd (HKG: 0700) network and relationships to expand into new regions in Asia 

Foolish takeaway

I believe buying the Afterpay share price at today's prices would be the equivalent of chasing your losses. If I was still eager to buy Afterpay shares, I would instead be watching closely on the side lines for a better risk/reward entry price. 

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends PayPal Holdings. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Sezzle Inc and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended PayPal Holdings and Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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