Many investors will remember the buy-now-pay-later (BNPL) frenzy during the pandemic. Many fintech stocks skyrocketed, crashed, skyrocketed and then crashed again.
When the dust settled there were a few that survived the economic headwinds, regulatory changes and thin margins.
At the time of writing however, broker Bell Potter has identified fintech company Beforepay Group Ltd (ASX: B4P) as one that could explode in the near future.
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What is Beforepay?
Beforepay Group provides online payment services through mobile application. It offers consumers to manage their personal finances, offering additional access to pay earlier, without having to rely on credit cards or other forms of revolving debt.
While it isn't technically a BNPL, it provides 'Pay on Demand', giving customers access to their salaries before their payday. It charges a 5% transaction fee and gives users the choice between repaying their loan on their next payday or over 4 weeks.
After its initial public offering (IPO) a few years ago, its share price plummeted 44% and fell to as low as 0.25 cents per share back in 2022.
However, since then, it has climbed consistently, and at the time of writing, is sitting at almost $2 per share, having risen more than 200% in the last year alone.
Solid reporting season news
In its Q4 FY25 Business Update, BeforePay released the following data:
- The Company achieved a quarterly net profit before tax (NPBT) of $2.4m, up 76% on the Q4 FY24 figure of $1.4m, and up 113% from the previous quarter
- Revenue increased to $10.4m, up 15% YoY (year-on-year or YoY)
- Increased 12% YoY to 269,558
Beforepay Group CEO, Jamie Twiss said,
This quarter's result marks another milestone for the Group, with a significant increase in profitability, continued strong growth, and a series of client and partnership announcements for Carrington Labs. I couldn't be happier with this result; it's the perfect way to end a strong financial year.
Plenty of room left for growth
Despite rising significantly over the past year, broker Bell Potter believes the share price could continue the upward momentum.
The broker has a "buy" recommendation and price target of $3.00.
This indicates an upside of almost 54% from current levels.
Increased revenue, an active user base and lower default rates were all catalysts behind the recommendation.
