Is the Afterpay (ASX:APT) share price a buy today?

Is the Afterpay Ltd (ASX: APT) share price a buy today? Afterpay shares have recently made new all-time highs, but are down 10% in 2 weeks.

wondering about asx share price represented by man surrounded by question marks

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Afterpay Ltd (ASX: APT) share price is never far from the spotlight these days, at least that's what it seems. Afterpay shares rallied close to 150% in 2019. In 2020, investors have enjoyed another 200% on top of that, give or take. And anyone who was lucky enough to buy Afterpay shares on 23 March for around $8 per share (read it and weep) is sitting on a handy 1,000% gain.

These dizzying gains have come thanks to a rising Afterpay share price (naturally). Afterpay made a new all-time high of $105.80 earlier this month, but the Afterpay share price has since cooled somewhat. It closed at $94.69 yesterday. So is Afterpay a buy today? Let's see what's been happening lately with this buy now, pay later (BNPL) pioneer.

What's the latest from Afterpay?

As we canvassed above, the Afterpay share price has been under pressure over the past week or so. In fact, Afterpay is down around 10% since reaching the new all-time high on 9 November.

The catalyst for this move? Well, it's likely that investors are getting nervous about the increasing competitive pressure Afterpay is facing. For one, there is a large (and growing) bevvy of ASX-listed would-be Afterpay killers. Companies like Zip Co Ltd (ASX: Z1P), Splitit Ltd (ASX: SPT) and Sezzle Inc (ASX: SZL) are snapping at Afterpay's heels. But some larger, offshore giants are also smelling the roses. We reported back in September on payments titan PayPal Holdings Inc (NASDAQ: PYPL) entering the BNPL space.

Is BNPL competition heating up?

Last year, I even wrote a piece on credit card kingpin American Express Company's (NYSE: AXP) potential plans for the BNPL sector. But just yesterday, we also covered how another United States giant – the private company Affirm – is set to enter the Australian market. As my Fool colleague, Daryl Mather, told us yesterday, Affirm is currently the largest BNPL company in the US today in terms of monthly active users.

Perhaps adding to investors' negative sentiment around Afterpay was a report released by the government watchdog ASIC recently (which we also covered this week). This report found that as many as 1 in 5 consumers are missing BNPL payments, almost half of which were under 30 years old.

Despite all of these seemingly negative developments, the company is still growing at a very healthy clip. Afterpay held its annual general meeting this week. During the meeting, the company told investors that its active customers reached 11.2 million as of 30 September, which gave Afterpay $4.1 billion of sales in the quarter ending 30 September. That was up 115% from the $1.9 billion in sales the company did in the same quarter of 2019.

Is the Afterpay share price a buy today?

The Motley Fool's Pro Investing service currently rates the Afterpay share price as a 'buy'. The team at Pro likes how Afterpay is gaining traction, its growth rates and the company's massive total addressable market.

Sebastian Bowen owns shares of American Express. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends PayPal Holdings. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Sezzle Inc and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended PayPal Holdings and Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Growth Shares

Person pointing at an increasing blue graph which represents a rising share price.
Growth Shares

What to buy now with the ASX at a record high

Analysts think these shares could still rise strongly from current levels.

Read more »

A young man looks at a stylised investment graph superimposed on an exterior office building backdrop.
Growth Shares

Where to invest $10,000 in ASX 200 stocks today

Analysts think these high-quality shares are in the buy zone for investors right now.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Growth Shares

Two ASX industrials shares with buy recommendations

One broker believes these growth shares are set to rise.

Read more »

Man smiling at a laptop because of a rising share price.
Growth Shares

I think these 2 exciting ASX growth shares are buys today

These stocks could deliver big returns.

Read more »

a man in a business suit and carrying a laptop stands smiling with hand in pocket outside a large office building in a city environment.
Growth Shares

Buy these 2 impressive ASX 200 shares in July: experts

Experts are bullish about these two businesses.

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Growth Shares

3 ASX 200 shares set to dominate the next decade

Let's see why these shares could be great long term picks for Aussie investors.

Read more »

A group of businesspeople clapping.
Growth Shares

3 ASX growth shares with 10-year compounding potential

Let's see which shares are being tipped as buys for growth investors.

Read more »

Woman happy and relaxed on a sofa at a shop.
Growth Shares

Are these 2 top ASX growth shares buys?

Are these high-flyers still buys?

Read more »