Could this be why Afterpay (ASX:APT) and other BNPL shares are soaring today?

The Afterpay Ltd (ASX: APT) share price and other ASX buy now pay later shares have surged today. This could be why.

A teacher in front of a classroom chalkboard filled with questionmarks, indicating share market uncertainty

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

ASX buy now pay, later (BNPL) shares have pushed higher across the board on Thursday. At the time of writing, the Afterpay Ltd (ASX: APT) share price is 7.37% higher, eyeing its previous record all-time high of $123.40 and Zip Co Ltd (ASX: Z1P) shareholders can breathe a sigh of relief as its shares are 4.4% higher. 

Elsewhere, the Sezzle Inc (ASX: SZL) share price is 6.62% higher following its record fourth quarter results announced on 12 January 2021. 

The Laybuy Holdings Ltd (ASX: LBY) share price is 8% higher after announcing record third quarter results today. Some laggards include Splitit Ltd (ASX: SPT), Openpay Group Ltd (ASX: OPY) and Humm Group Ltd (ASX: HUM), which haven't seen the same level of gains.  

While ASX BNPL shares are grinding higher, a new US-based BNPL initial public offering (IPO) soared on its debut yesterday, demonstrating investor appetite for fintech IPOs and BNPL shares. 

US BNPL Affirm doubles on debut 

Affirm is a US-based BNPL player with a classic product that allows shoppers to pay for purchases in fixed amounts over time without deferred interest, hidden fees or penalties. In FY20, the company recorded 6.2 million customers, 6,500 merchants and US$4.6 billion in gross merchandise volume. 

The company raised $1.2 billion in an initial public offering at an offer price of $49 per share. Its shares surged to $97.24 at the market close on Wednesday, an almost 100% gain. 

The surging Affirm share price has ballooned its market capitalisation to around US$23 billion on FY20 revenues of US$509.5 million. This values the company at approximately 45 times FY20 revenue. 

What about ASX BNPL shares? 

If we looking at the major ASX BNPL shares with operations in the US, it's the Afterpay share price that has surged the most today.

At its current market cap of $31 billion with FY20 revenue of $502.7 million, the company appears to be more expensive, trading at a revenue multiple of 62. That said, the Afterpay share price delivered some of the best returns in 2020. The company has expressed its intention to maintain its growth trajectory by expanding into the rest of Europe and develop a strategy for the South Asia market. 

In comparison, the Zip share price has seemingly gone nowhere recently. The company currently has a market cap of $3 billion with FY20 revenue sitting at $161 million. It trades towards the lower end of the spectrum with a FY20 revenue multiple of just 18.

Lina Lim has no position in any of the stocks mentioned. 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. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Humm Group Limited and Sezzle Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

Person pretends to types on laptop drawn in sand.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a happy finish to the week for ASX shares this Friday.

Read more »

Five young people sit in a row having fun and interacting with their mobile phones.
Share Gainers

5 ASX All Ords stocks rocketing higher this week

Investors sent these five ASX All Ords stocks soaring this week. But why?

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why Boss Energy, Capstone, Dimerix, and Platinum shares are storming higher today

These shares are having a good finish to the week. Let's find out why.

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

It was the ASX's fourth day of gains for the week today.

Read more »

a man raises his fists to the air in joyous celebration while learning some exciting good news via his computer screen in an office setting.
Share Gainers

Why Cedar Woods, Healius, NextDC, and Platinum shares are charging higher today

These shares are rising on Thursday. But why are investors buying them? Let's find out.

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
Share Gainers

These were the best-performing ASX 200 shares in April

These shares were in fine form in April. Let's see why they outperformed.

Read more »

Hiker man backpacker with hands up in the summer mountains with cloudy sky.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX made it three from three.

Read more »

Ecstatic woman looking at her phone outside with her fist pumped.
Share Gainers

Why Cedar Woods, Orthocell, PEXA, and St Barbara shares are storming higher today

These shares are having a good session on hump day. But why?

Read more »