The EarlyPay Ltd (ASX: EPY) share price has been erratic today. With no news out from the non-bank lender we take a look at what’s going on.
The post What’s the go with the EarlyPay (ASX:EPY) share price today? appeared first on The Motley Fool Australia. –
The EarlyPay Ltd (ASX: EPY) share price has been a rollercoaster today. Initially, shares in the non-bank lender jumped on open to 50 cents, an increase of 16%. Celebrations were short-lived with the shares taking the elevator back to 44 cents.
The price movements are cause for some head-scratching, as there are no announcements. Let’s take a look at what could be happening.
What might be moving the EarlyPay share price?
EarlyPay rebranding resonates with rocketeers
EarlyPay was previously known as CML Group – just doesn’t have the same ring to it, does it? The recent rebranding was a part of the company’s shift towards a new software-as-a-service (SaaS) operation after acquiring Skippr.
Transitioning to more of a digital-leaning lender, EarlyPay likely hopes to replicate the success of ASX-listed Wisr Ltd (ASX: WZR) in its digital endeavours. EarlyPay does differ from Wisr though, as the former provides secured finance to small and medium-sized businesses. Whereas Wisr offers loans to individuals for travel, car purchase, etc.
With the acquisition of Skippr, EarlyPay can now assess credit quality through integration with cloud accounting data automatically. Additionally, the whole onboarding process for a customer is now automated – significantly reducing the time and effort required on EarlyPay’s end to facilitate a loan.
There is the potential that some are speculating over the name EarlyPay, as it sounds a little like Afterpay Ltd (ASX: APT). With the buy now, pay later (BNPL) sector heating up, everyone is hunting for new entrants. However, EarlyPay isn’t quite a BNPL company – although the debate rages on whether BNPL is just glorified credit.
EarlyPay profitable growth play
Investors could also be enticed recently by the fact EarlyPay is profitable. As a consequence of the recent SaaS shift, the company may be appealing to investors less fancied with loss-making businesses.
In its October 2020 investor presentation, EarlyPay recorded $8.4 million in profits on $47.5 million revenue. Based on today’s valuation, that gives EarlyPay a P/E ratio of 11.85 – which would be considered low for a technology company. But, then the debate arises, is it a technology company or just a lender?
Whatever the answer, the EarlyPay share price has had a whirlwind day. At the time of writing, EarlyPay shares are swapping hands for 44 cents, which puts it up 1.16% today and 14% for the year so far.
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.
*Returns as of February 15th 2021
- One year on and 50% up, the All Technology Index is booming
- What’s with the Afterpay (ASX:APT) share price fall today?
- Why is the Splitit (ASX:SPT) share price underperforming Afterpay and Zip?
- The Cirralto (ASX:CRO) share price is hitting 52-week highs today
- Zip (ASX:Z1P) share price is soaring 13%, smashing another record high
Motley Fool contributor Mitchell Lawler owns shares of AFTERPAY T FPO. 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.