Motley Fool Australia

Openpay (ASX:OPY) share price erases gains despite positive update

A hand moves a building block from green arrow to red, indicating negative interest rates
Image source: Getty Images

The Openpay Group Ltd (ASX: OPY) share price is on the backfoot this morning despite announcing a lucrative partnership with a key automotive group. At the time of writing, the buy-now, pay-later (BNPL) provider’s shares are down 3.74% to $3.09.

What did Openpay announce?

The Openpay share price is coming under pressure today as investors seem unfazed by the company’s positive news.

According to this morning’s release, Openpay advised that it has entered a partnership agreement. The new agreement is with Ford Australia which is a subsidiary of its global parent group, Ford Motor Company.

In the deal, Openpay’s BNPL solution will be offered to Ford Australia customers. It will be available through its dealership network for car servicing needs. This will include repairs, parts, and accessories in which a customer may not be able to afford upfront.

The BNPL option will be rolled out across Ford Australia’s booking engines, including online and in-store platforms.

Openpay highlighted that its latest contract win is a major milestone achievement along with the Pentana deal which went live this month. The company noted that around 2500, or 60% of Australia’s new car franchise dealerships, use Pentana’s eraPower Dealer Management Software.

The signing of Ford Australia further strengthens Openpay’s business model to be a leading BNPL provider in the automotive sector. The company also operates in the healthcare, home improvement, education, and memberships markets.

Openpay revealed that it will continue to focus on building further partnerships with original equipment manufacturers, distributors, and importers within the automotive industry.

Management commentary

Openpay Managing director and CEO Michael Eidel welcomed the new partnership, saying:

We are proud to have signed with a brand as iconic as Ford Australia. Through this partnership we will be working together to help Ford’s customers ‘go further’ – making greater payment flexibility available for all their car servicing needs.

We have previously partnered with many dealership groups but partnering at the OEM level strongly cements our leadership position in the automotive vertical.

Openpay share price snapshot

During the last 12 months, the company’s shares have accelerated to achieve a gain of more than 160%. It’s worth noting that during the COVID-19 rout, the Openpay share price listed for as low as 32 cents. At today’s current price, this represents close to a 10-fold increase in less than a year.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Related Articles…

Aaron Teboneras