The Afterpay Touch Group Ltd (ASX: APT) share price has flown over $20, could it reach $30 this year?
Afterpay Touch is the owner of the popular “buy now, pay later” app. As of early 2019, Afterpay had over 3.5 million registered users worldwide, making it one of Australia’s true technology success stories.
Could The Afterpay Share Price Reach $30 This Year?
Anything is possible. The Afterpay share price has already risen another 4.3% today.
A year ago the Afterpay share price was only at $6 and it has rocketed to the current all-time high of nearly $23.50. The share price has nearly quadrupled in just a year!
Some value investors might argue that Afterpay is now wildly overvalued and it’s going to come crashing down. People were saying that when the share price rose to $21 in August 2018, they were proved right when it dropped to $10.63 before the end of the year due to worries about a Senate Inquiry.
But as you may have seen, Afterpay defended itself and its model admirably. Afterpay ended up being praised by the inquiry for bringing competition to the sector and a new way of doing things.
These days it looks like the sky is the limit for Afterpay, according to some investors. The company has revolutionised the way younger Australians pay for things, Afterpay has captured more than 10% of the online fashion market.
One part of Afterpay that some investors may not be noticing is its expansion into other industries. Retail is a huge market, but it also has partnerships with Village Roadshow Ltd (ASX: VRL), Bupa Optical, OPSM, dentists and hair & beauty.
The United States is a huge potential market for Afterpay, but it’s already making excellent progress there. It achieved more in six months in the US than it did in two years in Australia.
If Afterpay can capture just 5% of the US online fashion retail market then it would become a huge player and today’s share price could well be cheap. Afterpay could beat its $20 billion gross merchandise value (GMV) target quite easily before FY22 if the US really takes off.
The UK is another market which is materially bigger than Australia. Other countries like Canada could be the next ones to be visited by Afterpay.
If Afterpay continues to capture thousands of new US customers a week, and can start off well in the UK in a few months, then a share price of $30 could well be reached by the end of the year. But, there’s a lot of ‘ifs’ for that to happen.
I am delighted for Afterpay and its shareholders that it is doing so well, but I would rather invest in businesses that aren’t priced for huge success in-case something goes wrong. The ASX growth stocks in the free report below look much better value today.
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