The Afterpay Ltd (ASX: APT) share price is jumping today as investors learned of some North American growth.
Afterpay is one of the largest buy now, pay later businesses in the world. Whilst it started off in Australia, Afterpay looks to North America to deliver most of its growth in the coming years.
What did investors learn today?
It is being reported today by the Australian Financial Review that Afterpay has signed a range of new partnership deals with various Canadian retailers.
According to the reporting, Afterpay has signed with SHEIN, Rains, Triarchy and Clarins.
Afterpay’s Head of North America, Melissa Davis, said: “Afterpay is growing rapidly in Canada, especially among Millennial and Gen Z consumers, because our service helps young shoppers budget their own money and pay over time.
“In doing so, our retail partners benefit by attracting new, highly engaged young consumers – helping them increase sales, basket sizes and conversion during the most important retail season of the year.”
It was only a month ago that Afterpay revealed it was partnering with GAP, Old Navy, Banana Republic and Athleta.
Gap Inc is the largest company to offer Afterpay’s service on its e-commerce platform.
What does this mean for Afterpay?
The more merchants that Afterpay can sign up, the more likely a customer is likely to sign up to Afterpay. It’s a virtuous cycle. The more consumers there are, the more likely Afterpay can win over bigger merchants. If there are more merchants then a consumer is more likely to pick Afterpay because of its wider choice.
Afterpay shares are back above $100 after investors became more excited about the buy now, pay later company.
Is it worth buying now? Who knows. It’s done exceptionally well at growing its reach, consumers, merchants and underlying sales. But what about profit? When will it start generating bottom line earnings? Does that matter to investors?
I’m not looking to buy Afterpay shares with so much growth in-built into the share price. In terms of ASX growth shares, it’s donation payment business Pushpay Holdings Ltd (ASX: PPH) that attracts me the most at the moment with growing profit margins.
