Search ASX code:
Generic filters

The Afterpay (APT) share price & WiseTech (WTC) share price are going nuts

The Afterpay Ltd (ASX: APT) share price and WiseTech Global Ltd (ASX: WTC) share prices have been on a tear these past few days despite more economic concerns sparked being sparked by the Coronavirus outbreak.

APT & WTC share prices bounce back

Afterpay and wisetech shares are down more than 30% since the beginning of 2020
Red line = Afterpay; blue line = Wisetech. Source: Google Finance.

Both Afterpay and WiseTech shares are down heavily since the beginning of 2020 (39% and 33%, respectively), as can be expected.

However, at one point in time Afterpay shares had fallen more than 70% from their 2020 peak just a few weeks earlier.

Analyst valuation of Afterpay shares

According to analysts surveyed by The Wall St Journal, 8 of the 13 analysts providing ratings on the stock label Afterpay as a Buy and have slapped it with an average price target of $31. That compares favourably to the current share price of around $18.

A month ago, the spread of analyst ratings was slightly more negative, hinting that analysts could now be turning more positive despite concerns over bad debts and the likelihood of rapidly rising unemployment in Australia, the UK and USA.

Analyst valuation of WiseTech shares

The same positive shift in sentiment can also be said about analysts covering WiseTech Global. The average analyst price target is $21 for the company, hinting at slight undervaluation.

However, as we always say here at Rask, you should take analyst price targets with a pinch of salt because they are almost never exactly right. Specifically forecasting the future is very difficult, especially when we consider the complexity of contagious viruses impacting businesses and consumers.

What now?

While both companies have noticeable risks, there is a lot to like about owning technology darlings like these over the long run — especially for those who have thick skin and acknowledge the heightened risks.

WiseTech is becoming one of the leaders in software for distribution and logistics companies throughout Europe and the UK. While these areas are deeply affected by COVID-19 right now, and likely will be for at least six months, WiseTech stands to benefit as its CargoWise product effectively ‘clips the ticket’ on every parcel monitored by its systems.

Afterpay is the leading Buy Now, Pay Later business in Australia and it’s taking on the globe. Like WiseTech, it is facing the prospect of much slower growth in the USA and Europe as the COVID-19 outbreak will prompt millions of consumers to avoid spending on discretionary items (think fashionable clothing, electronics, etc.).

This lower growth rate is one reason I’m still skeptical of the analysts’ valuations — they might not have been updated yet to properly reflect the curb in discretionary spending throughout Afterpay. This can also drive up customer acquisition costs (CAC). If you’re thinking about buying Afterpay shares, you should read our analyst’s review of the company: “The real reasons Afterpay is down 70%

That said, if Afterpay survives the recession and lives to tell the tale it could go on to become a promising payment provider and advertising business.

Disclosure: the author of this article does not have a financial or commercial interest in any of the companies mentioned.

Afterpay, Zip Co, Sezzle…

Is BNPL the opportunity of a lifetime or is the sector a ticking time bomb?

Rask's analyst has just finished a 7,500-word report, The Ultimate BNPL Sector Report, taking a deep dive into this booming ASX sector. It shines a spotlight on each of the major players. You can get the full analyst report for FREE by CLICKING HERE NOW or entering your email below.

Note: the report is 100% free.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Afterpay, Zip Co, Sezzle…

Is BNPL the opportunity of a lifetime or is the sector a ticking time bomb?

Rask's analyst has just finished a 7,500-word report, The Ultimate BNPL Sector Report, taking a deep dive into this booming ASX sector. It shines a spotlight on each of the major players. You can get the full analyst report for FREE by CLICKING HERE NOW.

Note: the report is 100% free.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

Rask Media’s Ultimate BNPL Sector Report

Afterpay, Zip, Sezzle… is this the opportunity of a lifetime? Or is BNPL a ticking time bomb? This 7,500-word analyst report takes a deep dive into the BNPL sector and shines a spotlight on each of the major players in this booming market. 

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

As we emerge from COVID-19, some tech companies are growing faster than ever. Rask’s investment analysts have identified 3 growth stocks set to benefit. Big time.

Enter your email below to access this report for free, including the names, ticker codes and analysis.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.