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    APT   AU000000APT1

AFTERPAY LIMITED

(APT)
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Afterpay's move to open to major U.S. merchants will boost margins, analysts say

06/24/2021 | 02:08am EDT
FILE PHOTO: A logo for the company Afterpay is seen in a store window in Sydney

* Afterpay shares rise as much as 7.7%

* Analysts see higher margins from expansion to major U.S. merchants

* Citi expects Quadpay to be negatively impacted by Afterpay move

June 24 (Reuters) - Afterpay's move to expand its buy now, pay later service to major U.S. merchants it has not directly partnered with will boost sales and margins, analysts said on Thursday, as the Australian company's shares rose nearly 8%.

The company will allow all users in the United States to shop at major 13 retailers, including Amazon, by this fall, just ahead of the crucial holiday shopping season, intensifying competition in the sector's biggest market.

"This functionality will be materially incremental to volume and frequency over time in the U.S.," said Tim Piper, an analyst at RBC Capital Markets.

Analysts also said that Afterpay's revenue and margins would get a boost from the move, with fees and interchange revenue likely to reach 7% of the transaction, compared with the 4% fee it charges merchants currently.

"Further, given the non-network merchants can only be accessed through the app, it increases consumers' engagement with the Afterpay app which in our view could unlock further monetisatiion opportunities in the future," Citi analysts wrote in a note.

The company's shares were trading around A$132.4 on Thursday, outperforming their peers.

Competition, however, is tight in the United States where BNPL firms, including Sweden's Klarna, Zip Co Ltd's Quadpa, and Afterpay, are squaring off against larger financial firms such as PayPal Holdings.

Quadpay will likely bear the brunt of Afterpay's move as customer retention improves, Citi said.

(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Aditya Soni)


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AFTERPAY LIMITED -1.66% 102.7 End-of-day quote.-12.97%
AMAZON.COM, INC. -2.20% 3618.405 Delayed Quote.13.60%
PAYPAL HOLDINGS, INC. -2.27% 299.9 Delayed Quote.31.00%
ZIP CO LIMITED -0.88% 6.74 End-of-day quote.27.41%
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Financials
Sales 2021 936 M 689 M 689 M
Net income 2021 -93,4 M -68,7 M -68,7 M
Net cash 2021 235 M 173 M 173 M
P/E ratio 2021 -341x
Yield 2021 -
Capitalization 29 743 M 21 968 M 21 897 M
EV / Sales 2021 31,5x
EV / Sales 2022 19,2x
Nbr of Employees 930
Free-Float 69,2%
Chart AFTERPAY LIMITED
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Technical analysis trends AFTERPAY LIMITED
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Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 16
Last Close Price 102,70 AUD
Average target price 125,54 AUD
Spread / Average Target 22,2%
EPS Revisions
Managers and Directors
Anthony Mathew Eisen Co-CEO, Executive Director & Managing Director
Nicholas David Molnar Co-CEO, Executive Director & Managing Director
Rebecca Lowde Chief Financial Officer
Elana Rubin Independent Chairman
Dana Stalder Independent Non-Executive Director
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