Many ASX-listed buy now, pay later shares eye the US market as a key growth opportunity given its $5 trillion total addressable retail market. Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and Sezzle Inc (ASX: SZL) are the ASX players taking charge for customer acquisition and market share.
Affirm Holdings Inc (NASDAQ: AFRM) might have slipped under the radar for many investors given the fact that its listed on the Nasdaq Composite (INDEXNASDAQ: .IXIC). How does the Afterpay share price size up against its biggest US rival?
Affirm share price snapshot
Affirm is the largest US-listed BNPL provider. The company listed on the Nasdaq on 13 January 2021 at an initial public offering (IPO) price of US$39 and an indicative market capitalisation of approximately US$10 billion.
Its shares ran as high as US$146.90 by mid-Feb or a 275% return for investors that managed to participate in the IPO. The recent tech-led selloff has seen the Affirm share price more than halve since its $146.90 high to close at $69.56 on Thursday.
Affirm vs. Afterpay share price comparison
Below are some of the key metrics that could be used to gauge the size of a BNPL player.
| Affirm | Afterpay | |
| Gross Merchandise Value (USD m) | 6,010 | 12,014 |
| Active customers (m) | 4.5 | 13.1 |
| Active merchants (000s) | 7.9 | 74.8 |
| Market cap USD (m) | 20,482 | 25,119 |
| Funding capacity (USD m) | 4,700 | 1,044 |
Source: Macquarie Research, March 2021
Despite the significant market capitalisation of Affirm, the company only has regional exposure to North America.
In comparison, Afterpay has operations in Australia, New Zealand, the UK (Clearpay), the US, Canada and Europe (Pagantis). Afterpay has also created a base in Singapore and is exploring opportunities to target the South East Asia market.
Why does the Afterpay share price look cheap?
The Afterpay share price is significantly ahead of Affirm across all key KPIs except funding capacity. This might make the Afterpay share price look cheap at face value.
US shares have the tendency to be more richly valued with a much deeper pool of investors and liquidity. This could be why capital intensive ASX-listed shares such as Piedmont Lithium Ltd (ASX: PLL) and Mesoblast Ltd (ASX: MSB) are also listed on the Nasdaq.
This may also explain why the Zip share price surged in February on the back of speculation that the company could be looking at a secondary listing in the US. This would allow US fund managers easier access to Zip shares and greater accessibility to the capital markets when necessary.
