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The financial technology company, Afterpay Touch Group Limited (ASX:APT), has secured the attention from leading market researchers like Goldman Sachs and Bell Potter as they now estimate APTâs stock price to range above $20 in the long run.
Despite the latest downtrend in the stock price of Afterpay Touch, the analysts have placed bullish targets based on the companyâs expansion plan to the United States and the United Kingdom. The analysts believe that the company is growing faster than anticipated and it would not be a surprise if the stock price reaches to a peak of $28. [optin-monster-shortcode id="swikrbu1d9j9aq0o4cko"]
However, investors can currently be seen in the bearish mood as the stock price plunged as much as 11.463% to $18.150 in reaction to the material decline in the companyâs late fee income as announced in half-yearly results, yesterday, i.e., 26 February 2019. The late fee income as a percentage of total Afterpay statutory income stood at 17.6% for the six months ended 31 December 2018, declining materially from 22.5% in the previous corresponding period.
This drop in late fee income did not have any much impact on the Afterpayâs business as the total value of sales processed through the Afterpay platform increased 147% to $2.3 billion in 1HFY19 and also there has been the corresponding decline in gross losses.
Afterpayâs global expansion plans remain the heart of brokers outlook. The company aims to expand its footprint in the American market, eyeing millennials as its target customers that make up 27% of the global population.
The companyâs active customer base in the US grew by approximately 40% since 31 December 2018. It outlines the companyâs innovative business model that responds to a generational shift in spending behavior, with two out of three 18 to 30 year old in the US not using a credit card.
The market analysts are of the view that the companyâs short-term performance may be hampered due to further expenditure on global expansion but Australiaâs leading fintech player, Afterpay, is on track to report substantial gains in the long term.
In the interim results, Afterpay announced that its business is well in line to have attracted over 1 million active customers and 2,000 active merchants in the US by the end of March. As at 31 December 2018, the company has recorded over 3.1 million active customers, up 118% on the previous corresponding period.
Moreover, Afterpay has experienced that millennials are sticking with it along with their growing age as the average customer age has increased to 33. Its power has shifted to the millennial consumers who are expected to have the highest spending power at nearly $15 trillion worldwide by 2020 and contribute almost half of all salary earned income in the United States by 2025.
In todayâs trading session, APT dropped by 2.81% to last trade at $17.640 on 27 February 2019. However, in the past 12 months, the stock has gone up massively by 154.92% including the surge of 52.01% in the past three months.
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