Insights

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.
The post Affirm shares are surging, why is the Afterpay (ASX:APT) share price left behind? appeared first on The Motley Fool Australia. –

Two boys in baskets on skateboards race each along a road, indicating competition between rival share prices

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. 

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Affirm shares are surging, why is the Afterpay (ASX:APT) share price left behind? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!