Afterpay’s first half revenues grew 89% year on year, but that was sequentially below growth of 97% and 96% in the prior two halves and short of expectation. The broker has taken a knife to earnings forecasts, bearing in mind the company is not yet an earner.
Despite revenue growth missing estimates, other key metrics remained robust, but catalysts to justify material further upside from the current levels are unclear to the broker. Investors are clearly concerned about increasing competition in BNPL.
Neutral and $140 target retained.
Sector: Software & Services.
Target price is $140.00.Current Price is $119.52. Difference: $20.48 – (brackets indicate current price is over target). If APT meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).