Afterpay Touch (APT) - An Absolute Screamer

[Toulouse - Luzern]

My recollections from my review of report and apparent strategy. (Usual E&OE and DYOR caveats apply)


Analysis and Risk Assessment

(1) APT SP rose when it seemed unlikely their activities would be impacted by any Govt action post the Royal Commission.
(2) In the most recent report APT reduced the amount of revenue earned from people unble to pay on time reinforcing (1). APT have declined up to 30% of proposed transactions. APT approved customers are good for retailers as proven payers building from low initial $ levels.
(3) Retailers like APT as its charges are less than Credit Cards. 1.75% compared with most at 2% or >. Retailers payments of 1.75% provide most of APT revenue. Every APT sale is more profitable for the retailer.
(4) Terrific growth on any metric - AU US UK and potentially Europe and World. # Customers, # transactions, # retailers, $ value,
(5) Fundamentally I see the key strategic metric is gross revenue at 1.75% of transaction $ and to me does not seem enough.
(6) Retail customers are not targeted as revenue, to avoid possible Govt action or restriction ....
(7) Second key fundamental APT is not yet profitable
(8) Therefore the more you sell at 1.75% margin the more you lose, the more you grow or expand internationally - you get the picture
(9) Huge growth without profit = ???
(10) While the share price rose strongly up 47% in 8 weeks this year - ANZ Securities site today shows APT PE at -441

Now of course if the fundamentals and strategy as above change then ...