An extract from today's AFR:The buy now, pay later sub-sector also continued to perform well across the board, with Zip up more than 36 per cent andAfterpay up 14 per cent.
Mr Lockton said stocks like the buy now, pay laters were in a class of their own due to their extremely fast growth.
He believed the high multiples being fetched for comparative US companies such as Affirm would result in investors continuing to buy into these names.
“Both Zip and Afterpay are growing revenues by more than 100 per cent [annually] and that puts you in a different world for valuations,” Mr Lockton said.
“What we saw with the listing of Affirm is that US investors pay materially higher multiples [enterprise value/revenue] for these ultra-high growth stocks and that’s the case even after the price action for Afterpay through January. On that basis its multiple is halving every 12 months and the Aussie market is just getting comfortable paying those multiples.
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