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Is the Afterpay (ASX:APT) share price in the buy zone after its update?

Is the Afterpay Ltd (ASX:APT) share price in the buy zone after today’s third quarter update. Here’s what the experts think now…
The post Is the Afterpay (ASX:APT) share price in the buy zone after its update? appeared first on The Motley Fool Australia. –

The Afterpay Ltd (ASX: APT) share price has been a disappointing performer on Tuesday despite the release of a strong third quarter update.

In afternoon trade the payments company’s shares are down 1% to $124.87.

What did Afterpay report?

Afterpay continued its meteoric rise during the third quarter of FY 2021.

It reported a strong operating performance across all regions with underlying sales rising 104% over the prior corresponding period to $5.2 billion.

This was driven by a 75% increase in active customers globally to 14.6 million and increasing customer frequency across all regions. In respect to the latter, the top 10% of customers globally on average now transact 33 times per year.

Once again, the US business was arguably the star performer during the period. It reported a 211% increase in underlying sales to $2.6 billion. This means the North America region is now the largest contributor to underlying sales.

This was supported by a 48% increase in underlying sales in the ANZ market and a 246% jump in underlying sales in the UK market.

Afterpay shares get a US listing

Also catching the eye was news that there may soon be an Afterpay share price quoted on the US share market.

Management advised that it is doing this as the US is now the largest contributor and is expected to continue growing strongly.

In addition, its shareholder base is increasingly becoming more globally focused. It feels a US listing would further accommodate this growing interest.

Where next for the Afterpay share price?

 A number of brokers have responded to Afterpay’s quarterly results with quick updates.

Ord Minnett was pleased with the company’s performance and notes that underlying sales and active customer numbers were higher than it expected. It was also happy to see the company announce a launch into Germany in FY 2022.

Ord Minnett is reviewing its buy rating and $150.00 price target. If it holds firm, its price target implies potential upside of 20% over the next 12 months.

Elsewhere, according to note out of RBC Capital, Afterpay fell a touch short of expectations during the quarter. Though, it believes the company can still achieve its second half expectations. It has an outperform rating and $150.00 price target at present.

A note out of Macquarie reveals that Afterpay performed in line with its expectations. It also spoke positively about the US listing, which it believes will provide a large capital base and competitive advantages.

However, the broker isn’t currently in a rush to invest. It has a neutral rating and $120.00 price target on its shares.

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Motley Fool contributor James Mickleboro 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 Is the Afterpay (ASX:APT) share price in the buy zone after its update? appeared first on The Motley Fool Australia.

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