Could it be time to consider buying Afterpay (ASX:APT) shares?

Is Afterpay a buy today?

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New ASX share buy ideas

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The Afterpay Ltd (ASX: APT) share price certainly knows how to keep investors guessing. This buy now, pay later (BNPL) pioneer has had one of the most intense rollercoaster rides of any company on the S&P/ASX 200 Index (ASX: XJO) over the past 18 months or so. To illustrate, let’s go back to February 2020, just prior to the onset of the global pandemic.

In February 2020, Afterpay was riding high at its (then) all-time high of around $38 per share. Following the February/March market crash, things turned very bad, very fast. The Afterpay share price dropped like a stone, falling as low as $8 by the market bottom on 23 March. That was a fall of more than 70%.

But Afterpay subsequently recovered even faster. By early May, it was back to its pre-COVID levels, and by August, it had doubled them. 

The revelation that e-commerce giant Tencent Holdings had taken a 5% stake in Afterpay was the real catalyst here. But it also helped that a predicted recession-induced wave of BNPL defaults had failed to materialise.

The company continued to post record growth numbers across the United States and United Kingdom markets, and by February 2021, Afterpay had reached an all-time high of $160.05 per share. Yep, in under a year, this company may have given some investors a return of more than 1,800%. Yikes.

But that was then, and this is now. There’s no point in crying over spilled shares. So where to for Afterpay shares in July 2021? The company’s shares closed at $104.43 apiece yesterday, a good 35% from their February all-time high.

Afterpay share price: buy now and get paid later?

One broker who is bullish on Afterpay shares from here is Morgan Stanley. As my Fool colleague James covered last week, Morgan Stanley currently rates Afterpay shares as ‘overweight’, with a 12-month share price target of $145 for the BNPL company. The broker is reportedly bullish on the company’s new Money by Afterpay app, which it believes has the potential to double its Australian revenues. 

It’s not just Morgan Stanley either. My fellow Fool colleague Brendon has also recently discussed broker Macquarie‘s ‘buy’ rating on Afterpay as well.

At Afterpay’s closing share price of $104.43 yesterday, the company has a market capitalisation of $30.25 billion. 

Should you invest $1,000 in Afterpay right now?

Before you consider Afterpay, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Afterpay wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO and Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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