Market Commentary

Why Afterpay will always be the buy now, pay later king

Posted by Anton Murray Consulting on . Posted in Market Commentary


The Afterpay Touch Group Ltd (ASX: APT) share price has found its stride again and is up nearly 25% in less than 2 weeks. The company provided a business update last Wednesday that reiterated its strong performance across all metrics, from customer acquisition, new merchants, key partnerships and regional performances. This business update may have just put any previous concerns to rest.

Why were things going south?

The failed WeWork IPO and increasing concerns regarding high valuation, loss-making tech companies started to affect investor appetite for growth shares. Many ASX200 market darlings such as Appen Ltd (ASX: APX), A2 Milk Company Limited (ASX: A2M) and Altium Limited (ASX: ALU) have been sold down and have only recently started to gain some share price traction.

Furthermore, UBS had slapped a $17 price target on Afterpay, citing low barriers to entry, ease of replicating the product and regulatory risks. It believed that because Afterpay was trading at double the valuation of peers such as Mastercard and Visa, its share price could half within the next 12 months.

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