Afterpay still loss making
Stock
Afterpay (ASX: APT) $18.80 as at 26/02/2019
Event
Buy now pay later platform Afterpay has slumped today on soft half year results. Since last Wednesday, Afterpay has experienced some significant moves including a fall of 7.8% , a +19.2% rise yesterday while today it is currently trading more than -8% lower.
Today’s half year result missed the market despite showing substantial growth across the business. Both users & merchants have more than doubled over the past 12 months leading to a near 150% rise in transaction volume in the last 6 months of 2018. This dropped down to a half year EBITDA of $17m, falling around 3.5% short of one of the more conservative analyst estimates. Despite having a market cap of over $4b the company ran a loss for the half of $22.2m.
Expenditure continues to ramp up as APT accelerates its push into the US, and is also soon to launch in the UK, growth still remains king. There is no doubt that APT had the first mover advantage locally, but the same cannot be said for the new markets it enters. It is ahead of schedule in terms of overseas investment and the market seems to be fearing that these dollars spent won’t be seeing the same rate of return as its previous investments.
Locally, Afterpay bounced yesterday after the Senate inquiry handed down their final report after market Friday. The report eased fears of more strict regulation but did leave the door open for an increase in obligations for Afterpay.
Afterpay (ASX: APT) Chart
Market Matters Take/Outlook
