It certainly has been a great month for the Afterpay Ltd (ASX: APT) share price. Since the start of June, the buy now pay later (BNPL) provider’s shares have rallied an impressive 42% higher.
However, the same cannot be said for the Openpay Group Ltd (ASX: OPY) share price. During the same period, this BNPL provider’s shares have lost 2.5% of their value.
This means the Openpay share price is now down 35% since the start of the year.
Is the Openpay share price good value?
According to a note out of Shaw and Partners, its analysts believe the recent weakness in the Openpay share price is a buying opportunity for investors. Particularly given its recent announcement of a key acquisition in the UK market.
Shaw and Partners has a buy rating and $4.00 price target on the company’s shares.
Based on the latest Openpay share price of $1.57, this implies potential upside of 155% over the next 12 months.
What did the broker say?
Commenting on the acquisition, the broker said: “A very positive and significant announcement for OPY, indeed a transformational one in one of the world’s largest markets (UK), given it accelerates its position and opportunity in this market (effectively triples its UK TTV, increases customer numbers by >64%, accelerates the path to profitability and generates high returns and yields), and indeed secures its position as a major BNPL player in the UK, with the leading Auto BNPL provider.”
“It also potentially unlocks some synergies, in addition to pursuing adjacent opportunities in other verticals (e.g. professional services). It also further reinforces the differentiated offering that OPY provides to its homogenous “pay-in’4” peers (longer plans, higher plan values, greater plan flexibility, non-Retail focus, etc.).”
In addition to this, Shaw and Partners once again highlights that the Openpay share price is trading at a significant discount to its BNPL peers.
“OPY trades at a significant – and attractive – 41% discount to BNPL peers on an FY22 EV/Sales multiple of 5.0x vs. combined 8.6x (consensus),” it concluded.