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FlexiGroup Limited Have Experienced 25% Share Price Growth In 2 Days

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

 

flexiGroup - Report

Flexigroup Limited (ASX: FXL) have experienced 25% share price growth in 2 days and are trading at 52 week highs (Credit: ShareCafe).

 

FlexiGroup Limited (ASX: FXL) offers a variety of financing options to over 1.2 million customers (both consumers and businesses). They offer credit cards, consumer and businesses lending and most pertinently a buy now pay later service called Humm. The financial service company’s shares are now up over 25% in the past 2 days and are trading at 52 week highs.

The primary reason for this spike is the announcement of an addition of a number of high profile customers in the retail, home improvement and health care sectors of its buy now pay later service, Humm. The additions include Hanes Australasia, KOOKAÏ, Dealsdirect.com.au, surfstitch, Mitre 10 – owned by Metcash Limited (ASX: MTS) and Core Dental.

The recent additions have had undeniably favourable impact on FlexiGroup’s FY20 results, positing 85% volume growth across its key verticals compared to the same period in FY19. Furthermore, the Humm service has presented significant progress with total transactions up 25%, attributable to the 67% growth of ‘Little Things’ purchases (purchases up to $2000).

FlexiGroup’s CEO Rebecca James affords that Humm’s traction is attributable to its differentiated product offering, providing a BNPL service for a wider scope of transactions with greater repayment terms. She believes that the recent volume growth was triggered by “triple figure growth in health and retail verticals”.

2019 continues to be a strong year for FlexiGroup Limited, with share price growth of over 45% YTD. The continuing improvement of the financial results of FlexiGroup’s BNPL service Humm provide reason to believe it may be key to fostering growth and improving investor optimism regarding the company for years to come. When compared to BNPL industry leaders such as Afterpay Touch Group Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P), FlexiGroup appears a cheaper alternative with shares trading at merely 12x earnings.

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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