Afterpay Ltd (ASX: APT) announced its highly-anticipated H1 FY21 results on 25 February.
The results highlight classic Afterpay growth. This falls across all key metrics including a 106% increase in underlying sales to $9.8 billion and a 521% surge in earnings before interest, tax, depreciation and amortisation (EBITDA) to $47.9 million.
Despite the strong results, the Afterpay share price is down 25%. This fall has come since its record all-time highs of $160.05 set on 11 February. Its bleeding continued last week, falling by about 5% to close at $115.40.
Results and share price performance aside, there was one update that might have flown under the radar.
Meet Afterpay Money v1.0
Afterpay Money is a new stand-alone app built with Millennials and Gen Z in mind. The key purpose of the app is to help Australians manage their money.
The app aims to compete as a primary money management app. It comes complete with a linked debit card and other classic banking features. Users can add new cards into the digital wallet and a salary can be paid into the account directly. Additionally, money can be transferred to other financial accounts and up to 15 savings goals can be created.
The app will also link with an Afterpay account. Furthermore, savings and Afterpay buy now pay latter account information will all be in one spot. Afterpay will also introduce a loyalty program that includes premium merchant offers and no payment upfront.
Afterpay aims to leverage its rich data insights from its Westpac Banking Corp (ASX: WBC) partnership. In addition to internal data to inform customers about budgeting opportunities and personalised merchant offers.
The Afterpay Money app is on track to formally launch in Q1 FY22.
Brokers run the ruler on the share price
Brokers have pushed the breaks on upgrading the Afterpay share price due to increasing competition, a stretched valuation, and rising risks.
Ord Minnett appears to be the most bullish broker on the Afterpay share price with a buy rating and $150.00 price target on 1 March. The broker was pleased with growth across Northern American and UK regions. In addition to the value that Afterpay Money could bring.
Citi flagged the increasing risks such as slowing e-commerce sales post-COVID and rising competition. Despite the broker's reserved commentary, it was upbeat on Afterpay Money as a catalyst for new products and features. Taking into consideration both the risks and catalysts, Citi maintained a cautious neutral rating with a $124.80 price target on 3 march.
