There's been much debate about how much further 'buy now, pay later' ASX shares have to run since Square Inc (NYSE: SQ)'s massive acquisition of Afterpay Ltd (ASX: APT).
Has the industry matured? How can a sector full of loss-making businesses survive? Will more takeovers come along? Are regulations on the horizon?
In the midst of this, one expert has pointed out that one BNPL player's share price is looking very good to buy at the moment.
Humm Group Ltd (ASX: HUM) shares have fallen almost 27% this year, and it has a couple of sweet bonuses.
"In our view, the company has been overlooked by its more fancied peers, but we believe the market will see value in Humm given it's trading on a modest price/earnings multiple," Red Leaf Securities chief executive John Athanasiou told The Bull.
"This buy now, pay later company is profitable and it has also paid a dividend."
The case to buy Humm shares
Athanasiou is not the only expert hot for Humm stocks.
According to CMC Markets, 5 out of 6 analysts currently rate the shares as a "buy". The sixth one ranks it as a "hold".
And Athanasiou is correct in that the company already makes a profit, unlike many of its buy now, pay later rivals.
The 2021 financial year saw Humm boast a $60.1 million net profit off $437.3 million of revenue.
Athanasiou is also right that Humm pays out a dividend, which is unusual for a growth stock.
The fintech is giving out a 3.77% dividend yield, according to The Motley Fool's company profile.
The profitability and dividend payouts may be a result of Humm's long history. The company actually started providing finance in 1991 before its most recent foray into BNPL.
The case against buying Humm shares
Unfortunately, on the other side of the coin, Humm's buy now, pay later product was savaged by consumer group Choice this month.
Humm was singled out for a Shonky Award, with Choice accusing it of lending as much as $30,000 with "dubious checks and balances" that prevent "predatory debt".
"They don't need to check whether you can afford to repay a debt before they lend you money," Choice chief Alan Kirkland said.
"Choice asked Humm 4 times how they check whether they are lending safely and we could not get a straight answer. This is unregulated credit, pure and simple."
A Humm spokesperson told The Motley Fool that fewer than 1.5% of its customers end up applying for financial hardship support.
"We conduct a detailed product suitability check with third-party credit bureau Illion and mandatory income verification on all app-driven purchases in-store and online over $1,000," said the spokesperson.
"We then utilise our own sophisticated credit algorithms to ensure that customers have the ability to repay."
