The Afterpay Touch Group Ltd (ASX: APT) share price has been on form again today and is pushing higher in afternoon trade. At the time of writing the payments company's shares are up 1.5% to $32.70.
This latest gain means that the market darling's shares have now risen by a remarkable 165% since the start of the year and over 650% over the last two years.
To put the latter into context, if you had invested $20,000 into its shares in September 2017, that investment would now be worth over $150,000 today.
Why is the Afterpay share price on fire?
Investors have been buying the company's shares recently thanks to its impressive performance in FY 2019. During the 12 months to June 30, Afterpay Touch achieved a 140% increase in underlying sales to $5.2 billion, an 86% increase in total income to $264.1 million, and a 130% lift in active customers to 4.6 million.
A key driver of this impressive result was the performance of its U.S. operations. Underlying sales in the world's largest retail market reached almost $1 billion in FY 2019 and had a run-rate in excess of $1.7 billion at the end of the financial year.
In addition to this, investors responded very positively to the company's update on its UK launch. Its Clearpay business had an even stronger than expected start to life in the United Kingdom. According to its update, Clearpay on-boarded a massive 200,000 UK customers in the first 15 weeks of operation.
This is an even better launch than in both Australia and the United States and appears to demonstrate that the UK market is embracing the Afterpay model. Which is great news for the company as the UK market is a $700 billion opportunity.
And finally, news that the company has formed a partnership with Visa went down especially well with the market. There had been concerns that the payments giant was planning to disrupt Afterpay with its own offering, but this appears to have been ruled out with this arrangement.
Should you invest?
Whilst its shares are certainly expensive and better entry points could present themselves in the coming months, I still believe it could be a good long-term buy and hold investment today.
However, due to the risks involved, I would limit an investment to just a small part of your portfolio.
In addition to Afterpay, I think investors looking for exposure to the rapidly growing buy now pay later market might want to consider FlexiGroup Limited (ASX: FXL) and Zip Co Ltd (ASX: Z1P) as well.
