The S&P/ASX 200 Index (ASX: XJO) has bounced back strongly on Tuesday and is up over 3% in early trade.
This follows a positive night of trade on U.S. markets which saw both the Dow Jones and Nasdaq indices recover from an early sell off to record solid gains.
While a large number of ASX 200 shares are pushing higher today, one standout has been the Afterpay Ltd (ASX: APT) share price.
In morning trade the payments company’s shares have rocketed almost 8% higher to a new record high of $55.19.
It isn’t just Afterpay on the rise today. The Zip Co Ltd (ASX: Z1P) share price is also up 8% to $6.26 at the time of writing. This puts it within sight of its record high of $6.97.
Today’s gains mean that Afterpay’s shares are now up 590% from their March low and Zip’s shares are up almost 500% from their March low.
This has been driven by impressive sales and customer growth by both companies and the avoidance of a deterioration in bad debt levels during the pandemic. These positive metrics appear to have convinced the market that their business models are far more robust that many gave them credit for.
Can Afterpay and Zip shares go higher?
While the short term performance of their shares is difficult to predict, I believe over the long term their shares can go materially higher from here.
Thanks to international expansion, the increasing popularity of the payment method, and their massive market opportunities, I feel both companies are well-positioned to deliver very strong sales growth for many years to come.
Though, given the premium their shares trade at and the risks involved, I would suggest investors try to limit an investment in either of their shares to just a small part of a balanced portfolio.
I’m not alone in thinking they could be good options for investors. Earlier this month Morgans placed an add rating and $7.00 price target on Zip’s shares and Bell Potter put a buy rating and $65.00 price target on Afterpay’s shares.
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More reading
- Is the Altium share price the steal of the century?
- The top ASX growth shares I would buy for the 2020s
- The Afterpay share price is up 580% from its March low
- Got $5,000 spare? Consider Wesfarmers shares and these 2 other ASX companies
- Keep a watch on the Zip Co share price and 1 other ASX tech this June
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Afterpay and Zip shares are rocketing higher today: Can they go even higher? appeared first on Motley Fool Australia.
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