Its revenue is derived by charging retailers a percentage cut of the merchant sales facilitated by the Afterpay service.Īfterpay does not charge interest or hidden fees, and caps late fees so that they don’tĪccumulate. It does not charge its users interest, caps late fees and pauses accounts when customers miss a payment. Afterpay pays the retailer upfront and assumes all payment risk. There are a lot of new figures to get your head around: gross merchandise value (also known as underlying sales or total transaction value), net transaction margin, active customers, active merchants, repeat customers as a percentage of active customers – but not the traditional ones such as price/earnings (P/E) ratios, dividend yields or net tangible asset (NTA) values.Įxpected $941 million revenue FY21 – so 30.8 times forward revenueĮxpected $1,408 million revenue FY22 – so 20.6 times forward revenueĮxpected EPS 9.9 cents FY22 – so forward P/E 1,033.2 timesĮxpected EPS 47.5 cents FY22 – so forward P/E 215.3 timesĪfterpay is a payment facilitator that allows its users to split the cost of purchases into four equal two-weekly instalments over six weeks (with the first instalment paid at the time of purchase).
#Zip share price prediction zip
It now trades at $101.85, for a market value of $28.9 billion.Īt this price, I don’t think you can buy Afterpay anymore – but there is probably reasonable value still to be had in Zip Co, Splitit, Sezzle and Laybuy. Of course, if you link your credit card to your BNPL account and are unable to pay off your credit card balance on time, the experience will not be “interest-free.” It’s “fintech” innovation – but investors struggle to understand how the companies, which have yet to make a profit, can perform so well on the share market.Įverybody knows the story of the big kahuna of BNPLs – the first anyone had heard of “buy now, pay later” was when payments disruptor Afterpay listed on the ASX in May 2016, after raising $25 million at $1 a share in a heavily oversubscribed initial public offering (IPO), capitalising the company at $165 million.
#Zip share price prediction full
The platforms effectively lend you the full amount of the purchase (less your first instalment) but they don’t charge you interest. The platforms charge the retailer a fee per transaction – retailers are happy to pay this, because it allows shoppers to spend money they don't have, boosting sales.īNPL is an alternative to credit cards. The BNPL platforms allow customers to buy things now, receive them now, and pay for the purchase in instalments, over time, without having to pay interest. Welcome to the world of the buy-now, pay-later (BNPL) stocks – or as some people call them, the buy-now, profit-later stocks. It’s capital-intensive, it’s an area of intense competition, regulators continue looking askance at it, defaults are predicted to rise (but haven’t, as yet), the share prices go through the roof – but there are no profits yet to be seen.
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