By Deepta Bolaky
Afterpay Ltd remains Australia’s favourite tech stock. The Buy Now Pay Later company is the best performing stock on the Australian share market and its share price has risen by a staggering 204% since the beginning of the year.
Investors digested a series of good news for the tech stock this week. The shift to online shopping and the desire to switch to zero interest lending services make companies like Afterpay a good alternative to traditional forms of credit.
Afterpay kicked off the week with the announcement of its wholly-owned subsidiary Clearpay (Europe) Limited (Clearpay EU), has entered into a Share Purchase Agreement (Agreement) with NBQ Corporate SLU (NBQ) to acquire 100% of the shares outstanding in Pagantis SAU and PMT Technology SLU (collectively, Pagantis).
Afterpay expand into Europe with the purchase of the Spanish company to continue with its international expansion into new markets to capitalise on strong consumer demand and increase its global footprint.
“Afterpay has identified the European Union (EU) as the next logical step for international expansion due to its large millennial population, vast fashion and beauty retail markets, and significant debit card usage”
Morgan Stanley raised its target for Afterpay to $106. The investment bank is among the ones with the highest upside target as other brokers have been more conservative and kept their target below $100. The Company’s share price closed 11.8% higher after the announcement.
Afterpay reported strong FY20 corporate results. Underlying sales in all markets increased by 112% to $11.1b from 5.2b from the previous corresponding year. Underlying Sales contribution from these international markets increased from 18% in FY19 to 41% in FY20. COVID-19 and the shift to online shopping have been a key contributor to the growth momentum. In 2021, the Company also aim to explore opportunities in the Asian markets via a small acquisition of a Singapore-based company operating in Indonesia.
The Company reached an all-time high of $92.48 earlier this week before retreated lower. As of writing, Afterpay’s share price was currently trading at $88.75.
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