Openpay (ASX:OPY) share price edges lower despite bumper Q1 update

Shares are falling despite a breakthrough quarter for the small-cap buy now, pay later provider
The post Openpay (ASX:OPY) share price edges lower despite bumper Q1 update appeared first on The Motley Fool Australia. –

The Openpay Group Ltd (ASX: OPY) share price is struggling to catch a bid on Thursday after the company released its first-quarter update for FY22.

At the time of writing, the Openpay share price is down 2.19% to $1.34.

Openpay share price lower despite UK and US expansions

Openpay recapped a strong first-quarter performance with successful expansions across the UK healthcare sector and its debut in the United States. Highlights included:

Active merchants rose 87% against the prior corresponding period (pcp) to approximately 4,300;
Its active customers increased by 56% to about 579,000;
Active plans surged 110% to 2.2 million;
Record 85% of new plans from repeat customers and 55% of active customers with multiple plans;
Total transaction volumes (TTV) up 51% to $103 million; and
Total revenues of $7.0 million, impacted by Australian lockdowns.

“Through Q1FY22, we delivered continued strong operating and financial results despite challenging market circumstances for our key verticals in ANZ,” said Openpay CEO Michael Eidel.

What happened to Openpay in Q1?

Openpay is currently undergoing an aggressive strategy to acquire new customers in the Australia and New Zealand regions. Its initiatives include Officeworks co-marketing program, Bunnings magazine placements, a Melbourne Storm campaign, and MyHealth1st engagement for health customers.

This helped the company achieve a 73% increase in active plans in the region and a record TTV of $73 million.

Openpay’s services went live in the UK’s healthcare sector with its partner ezyVet and integration with Software of Excellence, a provider of dental software. That was in addition to expanding its retail, luxury, and music partnerships.

While the UK’s growth figures are coming off a low base, the region nevertheless achieved a 279% and 204% increase in active merchants and active plans.

Yesterday, Openpay announced it has successfully gone live in the United States. However, the news didn’t excite investors and the Openpay share price ended the day about 1% lower.

The company’s consumer product offers differentiated, longer-term (up to 24 months), larger-value, and customised payment plans. These are focused on specific verticals including healthcare, auto repair, home improvement, education, and big-ticket retail.

Openpay believes its US product fills the gaps not met by traditional buy now, pay later offerings.

“Our first US plans were signed and transacted in October, taking Openpay into its third major geographic opportunity. This was a major scene-setter for the step-change in business performance expected as we welcome customers in the world’s largest consumer payments market,” said Eidel.

What’s next for Openpay?

Looking ahead, Openpay said the US company could represent approximately two-thirds of the business over the next three years, despite the concurrent growth across the UK and Australia.

Openpay also stated its growth, now taking place across three major regions, will allow the business to grow at scale. This will ensure a clear path to profitability in the mid-term.

Openpay share price snapshot

The Openpay share price has declined 43% year-to-date.

Its weak performance might come as no surprise given its struggling small-cap peers such as Splitit Ltd (ASX: SPT) and Laybuy Holdings Ltd (ASX: LBY) have both tumbled more than 60% in 2021.

The post Openpay (ASX:OPY) share price edges lower despite bumper Q1 update appeared first on The Motley Fool Australia.

Should you invest $1,000 in Openpay right now?

Before you consider Openpay, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Openpay wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why is the Splitit (ASX:SPT) share price wobbling on Wednesday?

Openpay (ASX:OPY) share price rallies as services go live in the US

Laybuy (ASX:LBY) share price surges 14% on record quarterly

The Splitit (ASX: SPT) share price slumped 8% today. Here’s why

Openpay (ASX:OPY) share price jumps 13% on US update

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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!