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AfterpayTouch (APT AU)

  • Writer: Abacus Research
    Abacus Research
  • Jan 15, 2020
  • 1 min read

Apparently we like payment companies. Almost all of them. The ability to grow revenues at 2x cost growth and huge TAM is difficult to ignore. Afterpay is a leader in ANZ, and is early in exporting its product to the much larger U.S. market. 

  • Afterpay’s product has obvious and valuable benefits, both to merchants and consumers.

  • Afterpay has attractive economics with LTV/CAC of >30x, as marketing is mainly done by the merchants.

  • The moat is strengthening, and could become very strong due to network effect. 

  • We like Afterpay’s momentum to grow income at 50-70%pa over the next few years as it penetrates the U.S. and UK markets.

  • The key risk we see is execution, rather than regulatory or credit risk implicit in Afterpay’s model.


Potential Upside: A$57 (+74%)

Sensible Downside: A$23 (-30%)


 
 
 

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