The Afterpay (ASX:APT) share price fell 14% last time the company reported

Let's take a closer look.

man grimaces next to falling stock graph

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

The Afterpay Ltd (ASX: APT) share price has shown tremendous strength on the charts since the end of July.

Whereas the S&P/ASX 200 index (ASX: XJO) has climbed 1.2% from July 30 until today, Afterpay shares are 38% in the green.

Moreover, Afterpay is pencilled in to report its FY21 earnings on Wednesday. Given these facts, it's worthwhile checking the rear-view mirror to see how the Afterpay share price fared after its last earnings report back in February.

What did Afterpay deliver back in February?

Afterpay outlined several investment highlights in its half year results, including:

  • A 106% increase in sales to $9.8 billion; $10.1 billion on a constant currency basis
  • Total income growth of 114% to $385.2 million in constant currency terms
  • Mammoth 521% growth in EBITDA to $47.9 million
  • Loss after tax of $79.2 million.

Afterpay explains its recognised loss of almost $80 million on the bottom line stemmed primarily from the net loss in fair value on its financial liabilities of about $65 million from its Clearpay business.

Conversely, the company grew its number of active customers to 13.1 million, an 80% increase year over year.

How did the market react?

Firstly, after its report was released, Afterpay announced a trading halt on its shares to undertake a capital raise.

Next, investors were less than impressed regarding the company's net loss after tax back in February, so it seems.

Perhaps many expected the company would turn a net profit; nonetheless, on the day of resuming trade, Afterpay shares immediately sunk 14% and closed at $119.52. That was a 21% drop into the red from the week prior.

Following this, the Afterpay share price continued its descent until April, partially reclaiming the losses sustained over the month prior.

The Afterpay share price has not recovered to its all-time high just prior to its earnings release in February. To illustrate, the Afterpay share price is still around 12.5% off its record high, despite its recent run on the charts.

Doubtlessly, there have been other catalysts along this time that have added further downward pressure on the company's share price.

However, Afterpay shareholders will no doubt be hoping for a different reaction when the buy now pay later company reports its FY21 earnings on Wednesday.

Especially as the Afterpay share price has gained 25% over the last month.

Afterpay share price snapshot

The Afterpay share price has climbed around 13% this year to date, after a choppy period from February to July.

This extends the previous 12 month's gain of 61%, which has far outpaced the broad index's return of about 25% over the past year.

Afterpay has a market capitalisation of $38.5 billion at the time of writing.

The author Zach Bristow has no positions 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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Technology Shares

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 »

Five happy friends on their phones.
Share Market News

Goldman Sachs says these ASX tech stocks can rise 18% to 30%

The broker sees big returns on offer from these shares.

Read more »

A guy helps a girl lift a couch, both are laughing.
Technology Shares

3 of the best ASX tech shares to buy and hold until 2030

I think these stocks have exciting futures.

Read more »

A young woman uses a laptop and calculator while working from home.
Technology Shares

If I'd put $5,000 in Block shares 5 months ago, here's what I'd have now

Was it a good idea to invest in this payments stock five months ago?

Read more »

Close up of a sad young woman reading about declining share price on her phone.
Technology Shares

Why is the Brainchip share price sinking over 7% today?

What's going on with this tech stock on Wednesday?

Read more »

woman working on tablet
Technology Shares

Missed out on Nvidia? My best ASX tech stock to buy and hold

Do you have FOMO after the US chip maker's share price rocketed? Here's an Aussie company worth backing instead.

Read more »

Three businesspeople leap high with the CBD in the background.
Technology Shares

Guess which ASX small-cap stock is rocketing 45% on 'pivotal moment'

Investors have responded very positively to an announcement.

Read more »

A man looking at his laptop and thinking.
Technology Shares

Why are these ASX tech shares getting smashed today?

Owners of these two stocks are missing out today.

Read more »