Afterpay Touch Group Ltd (ASX: APT) shares are surging again today after the buy-now-pay-later specialist held a positive trading update this week.
Afterpay reported it added 15,000 customers per day over the month of October as it continues to grow at a breakneck pace in Australia, the US and UK. In total it now has nearly 40,000 retailers offering its platform to shoppers.
According to to its latest regulatory filing dated October 31 2019 the group has 252.7 million shares on issue to give it a market value around $8.34 billion based on a $33 share price.
In addition on November 13 it announced it will place $200 million worth of shares at $28.50 each to a private U.S. tech investor to take the market value closer to $8.5 billion post-placement.
Despite the high valuation for a business yet to post a profit brokers are generally enthusiastic about Afterpay, with both Goldman Sachs and Bell Potter retaining 'buy' ratings on the stock and valuations above $41.
At $33 it trades on 46x Goldman's estimates for 71 cents in earnings per share for the year ending June 30 2022.
There's a lot of water to travel under the bridge between now and then which means Afterpay is a high-risk bet at these valuations.
However, if it does meet analysts' aggressive consensus estimates it's possible the stock goes even higher over time.
