ASX buy now pay, later (BNPL) shares have pushed higher across the board on Thursday. At the time of writing, the Afterpay Ltd (ASX: APT) share price is 7.37% higher, eyeing its previous record all-time high of $123.40 and Zip Co Ltd (ASX: Z1P) shareholders can breathe a sigh of relief as its shares are 4.4% higher.
The Laybuy Holdings Ltd (ASX: LBY) share price is 8% higher after announcing record third quarter results today. Some laggards include Splitit Ltd (ASX: SPT), Openpay Group Ltd (ASX: OPY) and Humm Group Ltd (ASX: HUM), which haven’t seen the same level of gains.
While ASX BNPL shares are grinding higher, a new US-based BNPL initial public offering (IPO) soared on its debut yesterday, demonstrating investor appetite for fintech IPOs and BNPL shares.
US BNPL Affirm doubles on debut
Affirm is a US-based BNPL player with a classic product that allows shoppers to pay for purchases in fixed amounts over time without deferred interest, hidden fees or penalties. In FY20, the company recorded 6.2 million customers, 6,500 merchants and US$4.6 billion in gross merchandise volume.
The company raised $1.2 billion in an initial public offering at an offer price of $49 per share. Its shares surged to $97.24 at the market close on Wednesday, an almost 100% gain.
The surging Affirm share price has ballooned its market capitalisation to around US$23 billion on FY20 revenues of US$509.5 million. This values the company at approximately 45 times FY20 revenue.
What about ASX BNPL shares?
If we looking at the major ASX BNPL shares with operations in the US, it’s the Afterpay share price that has surged the most today.
At its current market cap of $31 billion with FY20 revenue of $502.7 million, the company appears to be more expensive, trading at a revenue multiple of 62. That said, the Afterpay share price delivered some of the best returns in 2020. The company has expressed its intention to maintain its growth trajectory by expanding into the rest of Europe and develop a strategy for the South Asia market.
In comparison, the Zip share price has seemingly gone nowhere recently. The company currently has a market cap of $3 billion with FY20 revenue sitting at $161 million. It trades towards the lower end of the spectrum with a FY20 revenue multiple of just 18.
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Returns as of 6th October 2020
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 ZIPCOLTD FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Humm Group Limited and Sezzle Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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