Why this new app has brokers excited for the Afterpay (ASX: APT) share price

While the Afterpay Ltd (ASX: APT) share price has gone south in recent weeks, brokers are excited for its new app launching in Q1 FY22.

Afterpay share price SquarePaypal credit card ASX shares Afterpay share price asx buy now pay later shares such as zip and afterpay share price represented by finger pressing pay button on mobile phone

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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. 

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. 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.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »