The Afterpay Ltd (ASX: APT) share price was among the best performers on the S&P/ASX 200 Index (ASX: XJO) in October.
The payments company overcame weakness in the tech sector to storm a remarkable 21% higher.
Here are three reasons Afterpay smashed the market:
Partnership with Westpac.
Last month Afterpay announced a surprise partnership with banking giant Westpac Banking Corp (ASX: WBC). The agreement will see the introduction of Afterpay savings accounts and cash flow tools for customers in Australia. The company advised that the new money management services will be facilitated by Westpac's new digital bank-as-a-service platform. It will allow Afterpay to provide Westpac transaction and savings accounts and other cashflow management tools to its millions of customers in Australia from the second quarter of 2021.
Underlying sales continue to grow at a rapid rate.
Another key driver of its share price outperformance was the release of its first quarter update, which revealed that its underlying sales are still growing rapidly. For the three months ended 30 September, Afterpay reported a 115% increase in underlying sales to a record of $4.1 billion. This was driven by a 229% increase in US underlying sales to $1.6 billion, a 346% jump in UK underlying sales to $0.3 billion, and a 63% lift in Australian underlying sales to $2.2 billion. This was underpinned by a 98% increase in active customers to 11.2 million.
Bullish broker note.
Finally, also giving the Afterpay share price a boost last month was a broker note out of Bell Potter. According to the note from 15 October, the broker has retained its buy rating and lifted its target price on the company's shares to $121.00. Bell Potter made the move after looking into its US in-store rollout. This in-store solution means shoppers in the US can use Afterpay to purchase items in select retail stores using their Afterpay card. This is a virtual card stored in the digital wallets of Apple and Android devices.
