Affirm shares are surging, why is the Afterpay (ASX:APT) share price left behind?

The Afterpay (ASX: APT) share price is down 6.9% this week despite US-listed Affirm charging 20% higher in the past 4 trading sessions.

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The Afterpay Ltd (ASX: APT) share price has found itself sliding 7% this week in stark contrast to its buy now, pay later (BNPL) rival in the United States.

The performance of US-listed Affirm Holdings Inc (NASDAQ: AFRM) is going gangbusters, with the Affirm share price up ~20% in the last four trading sessions to US$77.97.

Despite BNPL shares largely moving hand-in-hand, here's why the Affirm share price might be coming out ahead this week.

Why the Affirm share price is outperforming 

Recent acquisition targeting online returns 

The Affirm share price is likely being propped up this week by the company's $300 million acquisition of Returnly on 21 April.

Returnly allows eligible consumers to receive an instant merchant credit upon initiating a return, allowing them to order a new or replacement item immediately. The company takes on the product return risk and settles the order in real-time, making the return and exchange process seamless and helping merchants drive higher repurchase rates.

Affirm observes that an estimated $428 billion in merchandise was returned to retailers in 2020.

Affirm is still playing catch up against the Afterpay share price 

Taking a look at the bigger picture, Affirm's shares have slipped more than 45% from its February highs of US$146.90 and are down 15% since its first day of listing, where it closed at US$91.10.

By comparison, the Afterpay share price is down 25% since its all-time record high of $159.00.

Markets aren't made equal 

The broader market could be a driving force behind Affirm's rebound. 

The tech-heavy NASDAQ-100 (INDEXNASDAQ: NDX) has significantly outperformed the S&P/ASX 200 Index (ASX: XJO) in almost any time frame. The Nasdaq has increased 2.60% in the past four trading sessions, up ~9.60% year-to-date and up ~44% since its pre-COVID high. 

By comparison, the ASX200 is ~0.25% higher in the past four trading sessions, up ~5.25% year-to-date and down 2.25% since its pre-COVID highs. However, the ASX200 may not be a good representation or a driving force for Afterpay, given its weighting towards financials and mining. 

The S&P/ASX200 Info Tech (INDEXASX: XIJ) is down 4.50% year-to-date and up 32% since its pre-COVID highs, highlighting an underperformance in both a shorter and longer time frame. 

This outperformance and more rich valuation of US-listed shares is also a driving factor of why the Afterpay share price is eyeing a US listing

Afterpay still fetches a higher valuation 

With a market capitalisation of $33 billion, the Afterpay share price is still the most richly valued BNPL stock, trading at approximately 67 times FY20 revenue compared to the 39 times of Affirm. 

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