The Afterpay Ltd (ASX: APT) share price is never far from the spotlight these days, at least that's what it seems. Afterpay shares rallied close to 150% in 2019. In 2020, investors have enjoyed another 200% on top of that, give or take. And anyone who was lucky enough to buy Afterpay shares on 23 March for around $8 per share (read it and weep) is sitting on a handy 1,000% gain.
These dizzying gains have come thanks to a rising Afterpay share price (naturally). Afterpay made a new all-time high of $105.80 earlier this month, but the Afterpay share price has since cooled somewhat. It closed at $94.69 yesterday. So is Afterpay a buy today? Let's see what's been happening lately with this buy now, pay later (BNPL) pioneer.
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What's the latest from Afterpay?
As we canvassed above, the Afterpay share price has been under pressure over the past week or so. In fact, Afterpay is down around 10% since reaching the new all-time high on 9 November.
The catalyst for this move? Well, it's likely that investors are getting nervous about the increasing competitive pressure Afterpay is facing. For one, there is a large (and growing) bevvy of ASX-listed would-be Afterpay killers. Companies like Zip Co Ltd (ASX: Z1P), Splitit Ltd (ASX: SPT) and Sezzle Inc (ASX: SZL) are snapping at Afterpay's heels. But some larger, offshore giants are also smelling the roses. We reported back in September on payments titan PayPal Holdings Inc (NASDAQ: PYPL) entering the BNPL space.
Is BNPL competition heating up?
Last year, I even wrote a piece on credit card kingpin American Express Company's (NYSE: AXP) potential plans for the BNPL sector. But just yesterday, we also covered how another United States giant – the private company Affirm – is set to enter the Australian market. As my Fool colleague, Daryl Mather, told us yesterday, Affirm is currently the largest BNPL company in the US today in terms of monthly active users.
Perhaps adding to investors' negative sentiment around Afterpay was a report released by the government watchdog ASIC recently (which we also covered this week). This report found that as many as 1 in 5 consumers are missing BNPL payments, almost half of which were under 30 years old.
Despite all of these seemingly negative developments, the company is still growing at a very healthy clip. Afterpay held its annual general meeting this week. During the meeting, the company told investors that its active customers reached 11.2 million as of 30 September, which gave Afterpay $4.1 billion of sales in the quarter ending 30 September. That was up 115% from the $1.9 billion in sales the company did in the same quarter of 2019.
Is the Afterpay share price a buy today?
The Motley Fool's Pro Investing service currently rates the Afterpay share price as a 'buy'. The team at Pro likes how Afterpay is gaining traction, its growth rates and the company's massive total addressable market.
