The Harvey Norman Holdings Limited (ASX: HVN) share price has stormed higher today and is currently trading up 7.60%. It seems investors are taking heart from a positive outlook delivered by fellow furniture retailer Nick Scali Limited (ASX: NCK) this morning. Nick Scali reported that trading in July was extremely buoyant, following strong sales orders in May and June. 

Harvey Norman sales 

Harvey Norman reported a surge in Australian franchisee sales in the second half to early June. Sales were up 17.5% as housebound consumers looked to upgrade their home furnishings and appliances. Company-operated stores in overseas jurisdictions were closed for varying periods due to lockdowns, resulting in a mixed performance for the half year to early June. Sales in Ireland were up 17.5% and Malaysia saw sales growth of 12%, but Northern Ireland saw a fall in sales of 8.6% and Singapore sales declined 13.2%. 

Coronavirus impacts dividends 

Harvey Norman cancelled its FY20 interim dividend of 12 cents a share in April due to the uncertainty around the coronavirus pandemic. This resulted in $149.5 million in cash being retained by the business, providing liquidity during the height of the crisis. As restrictions eased, Harvey Norman elected to pay a special dividend of 6 cents per share in June. 

Full-year results 

Harvey Norman is due to report its full-year results at the end of the month. Given its product range of furniture, bedding, home appliances, and electronics, it is reasonable to assume Harvey Norman may have experienced the same strong sales growth as Nick Scali in recent months. Prior to the onset of the pandemic, company-operated retail operations were growing and increasing in profitability. Half year profit, however, was down 4.6% due to the impact of property valuations and the impact of AASB 16 on leases. 

Harvey Norman’s balance sheet is anchored by real property assets which were valued at $2.97 billion at 31 December 2019. The company says its property ownership is its driving point of competitive advantage in the Australian market. Harvey Norman either owns or leases the properties through which its brands trade, and sub-leases them to franchisors. This enables the group to respond swiftly to evolving consumer needs and quickly adapted to changes in retail trends. 

Foolish takeaway

All eyes will be on Harvey Norman when it reports its full-year results. The Harvey Norman share price is now up 63% from its March low, so investors will be expecting to see strong sales and profits. 

More reading

• ASX 200 up 0.6%: ResMed & Scentre tumble, big four banks rise
• Why BHP, Corporate Travel, Harvey Norman, & Nick Scali shares are pushing higher
• Nick Scali share price bolstered by strong outlook and dividend upgrade
• Super Retail and 2 other ASX retail shares to watch in August
• The ASX stocks hit by Victoria’s stage 4 forced shutdowns

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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I like to keep an eye on substantial shareholder notices. This is because these notices give you an idea of which shares large investors, asset managers, and investment funds are buying or selling.

Two notices that have caught my eye today are summarised below. Here’s what these fund managers have been buying:

BWX Ltd (ASX: BWX)

A notice of initial substantial holder reveals that Eley Griffiths Group has been buying this personal care products company’s shares over the last nine months. According to the notice, the investment management company has been building its position between 23 October and 31 July. During this time it has acquired 6,852,439 shares, which gives it a 5.04% stake.

Eley Griffiths appears to have been buying BWX shares for its EGG Small Companies Fund. As of the end of July, this fund has delivered an average return of 8.24% per annum over the last five years. Judging by its purchases, it appears to believe the addition of BWX could help its market beating run continue.

iSelect Ltd (ASX: ISU)

A notice of change of interests of substantial holder shows that Forager Australian Shares Fund (ASX: FOR) has been topping up its position in this price comparison website company. The notice reveals that Forager has picked up around 5.5 million more iSelect shares between 7 June and 3 August. Its biggest purchase came on the latter date, when it picked up 5 million shares for a total of $1,026,628. This equates to an average of 20.5 cents per share. That purchase lifted its holding to a total of 24,053,874 shares, which equates to an 11.04% stake.

The iSelect share price has been an incredibly poor performer over the last few years, but it appears as though Forager believes the tide is turning. Though, with the fund manager’s key Australian Shares Fund lagging the market by an average of 5.7% per annum over the last five years and 16.6% per annum over the last three years, I wouldn’t be in a rush to follow its lead just yet.

More reading

• Fund managers have been buying these ASX shares
• Fund managers have been buying these ASX tech shares
• Why AGL Energy, Alumina, BlueScope, & BWX shares are dropping lower
• ASX 200 finishes up 0.4%, Rio Tinto grinds higher
• Brokers name 3 ASX shares to buy right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited. 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.

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The Centaurus Metals Limited (ASX: CTM) share price is up more than 6% after the company announced positive drilling results at its Jaguar deposit in Brazil.

What was in the announcement?

Centaurus Metals said it had identified significant thick semi-massive to massive nickel sulphide intercepts in recent drilling at the Jaguar Central deposit.

The company identified 33.7 metres at 2.23% nickel from 45.6 metres, 15 metres at 2.42% nickel and 8.2 metres at 1.22% nickel at the deposit.

New drilling at the Jaguar North deposit had also intersected semi-massive sulphides 100m beyond the current limits of the existing mineral resource, with assays currently pending.

Centaurus Metals said the company’s recent $25.5 million capital raising would accelerate drilling work significantly. At the time of the announcement, Centaurus Metals had a cash position of around $28 million.

How good is that?

Centaurus Metals managing director Darren Gordon said the latest results included “some of the best drilling results generated from the Jaguar Project to date”.

Mr Gordon said the results boosted confidence in the company’s potential to grow the mineral resource in line with a plan to establish a sustainable high-margin nickel sulphide mine in Brazil within the next 3-4 years.

“These results are now building on the impressive maiden resource estimate we announced in June, which already contains more than 500,000 tonnes of nickel at an average grade of over 1.0% nickel,” he said.

About the Centaurus Metals share price

Centaurus Metals is an exploration company with a focus on the Jaguar nickel project in Brazil. 

In the quarter to June 30, 2020, Centaurus Metals used $2,536,000 cash in operating activities. The company had cash at June 30 of $4,996,000, this was down from $7,539,000 at the end of the previous quarter. 

In July, the company announced a $25.5 million capital raising at $0.42 cents per share, including a cornerstone investment from Canadian-based Dundee Goodman Merchant Partners. The funds are allocated for drilling, a scoping study and a pre-feasability study for the Jaguar project.

The Centaurus Metals share price has skyrocketed 647% from its 52-week low of $0.075 cents. It has returned 211% since the beginning of the year. The Centaurus Metals share price is up more than 6% at the time of writing to $0.52 cents.

More reading

• What sent the Envirosuite share price soaring 11% today?
• Earnings preview: What to expect from the Ramsay Health Care FY 2020 result
• Village Roadshow locked in a capital raise as it secures new $70m facility
• Harvey Norman share price gets a helping hand from competitor’s rosy outlook
• Fund managers have been buying BWX and this ASX share

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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Is the share price of Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) or National Australia Bank Ltd (ASX: NAB) a buy right now?

The big four ASX banks have taken a beating since COVID-19 impacted the share market and economy.

Since their February 2020 highs:

The CBA share price is still down 21%.

The Westpac share price has dropped 35%.

ANZ’s share price has fallen 35%.

NAB’s share price has declined 38%.

NAB was the only bank that did a capital raising during this period to strengthen its balance sheet. It raised $3 billion from institutional investors and $1.25 billion from retail investors at a discounted price of $14.15. I suppose it’s not surprising that NAB’s share price is down the most when the profit has to be shared among more shares

COVID-19 provisions

Each major bank has announced credit provisions due to COVID-19. Investors are expecting higher bad debts, it’s one of the main reasons why the share prices of CBA, Westpac, ANZ and NAB are down so much.

CBA provisioned $1.5 billion in relation to COVID-19 in its FY20 third quarter update.

Westpac announced a $1.9 billion of potential impacts from COVID-19 within its FY20 half-year result.

ANZ revealed that its COVID-19 credit provision was around $1 billion

NAB said in its FY20 half-year result that its COVID-19 provision was $807 million.

These provisions were made a few months ago, so we’ll have to see in the next update whether the provisions were too much or too little.

Several regions of Australia are now COVID-19 free – faster than many expected. New Zealand is also COVID-19 free. So that’s good news for the banks with economic activity able to get back to almost full levels.

However, Victoria in-particular is going to cause a hit to the economy, banks and confidence. Prime Minister Scott Morrison said this morning (as reported by the ABC) that the latest round of restrictions in Victoria will cost the economy by $7 billion to $9 billion. About 80% of the economic cost is expected to be caused from directly-affected businesses while the rest of the impact will be due to broader supply-chain effects and the impacts on national confidence. This could be bad news for the CBA share price.

Are the share prices of CBA, Westpac, ANZ or NAB a buy?

You can see that the big banks are going to be impacted at least over the next six to nine months by what’s going on. Maybe longer.

Banks are facing higher bad debts and lower net interest margins (NIM) for a number of financial years. The RBA has said that interest rates will stay lower for longer. Banks earn a lower return on their loans when the official interest rate is lower.

The CBA share price should priced for its medium to long-term earnings. I can’t see earnings getting back to its underlying FY19 profit figure (excluding the customer remediation) for at least 12 months. It may take two or three years.

Dividends were a big part of the returns before COVID-19. But due to the situation (and APRA’s guidance), dividends are going to be a lot lower in 2020 and probably 2021. CBA is going to cut its final dividend by at least 50%, perhaps a lot more, to retain capital. NAB implemented a major dividend cut in its half year result and the other two deferred their dividends.

Perhaps the CBA share price and others were buys during May – before we learned of the jobkeeper overestimation. Under $60 may have been a decent long-term buy price for CBA, but at above $70 I think I would prefer to be patient. But there are plenty of other shares I’d prefer to buy over CBA, even if it were a bit cheaper.

More reading

• Nick Scali share price bolstered by strong outlook and dividend upgrade
• Why I would buy CBA and this ASX dividend share
• The latest ASX stocks to be hit by broker downgrades today
• Why Cochlear, NAB, Tabcorp, & Telstra shares are tumbling lower
• ASX 200 down 1.15%: NAB downgraded, Telstra asset sale, gold miners rocket

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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The Corporate Travel Management Ltd (ASX: CTD) share price has been a very strong performer on the S&P/ASX 200 Index (ASX: XJO) on Thursday.

In afternoon trade the corporate travel specialist’s shares are up 6.5% to $9.13. At one stage they were up over 7.5% to $9.21.

Despite this, the Corporate Travel Management share price is down over 60% from its 52-week high.

Why is the Corporate Travel Management share price storming higher?

There appears to be a couple of catalysts for today’s strong gains.

The first is general buying in the travel sector today. As well as Corporate Travel Management, the likes of Flight Centre Travel Group Ltd (ASX: FLT), Helloworld Travel Ltd (ASX: HLO), and Webjet Limited (ASX: WEB) are all trading notably higher this afternoon.

This may be a sign that some investors believe their shares have been oversold in recent months and are now trading at very attractive levels.

One broker that believes Corporate Travel Management shares are a bargain buy is Morgans. I suspect a note out of the broker on Wednesday could be another catalyst for today’s gains.

What did Morgans say?

According to the note, the broker has upgraded the company’s shares to an add rating with a $12.85 price target. This price target implies potential upside of ~40% over the next 12 months.

Morgans made the move partly on valuation grounds after its share price fell materially lower than its valuation.

In addition to this, the broker’s industry research indicates that corporate travel markets have been stronger than expected recently. It believes this could mean that Corporate Travel Management surprises to the upside in FY 2021. Especially if it can win market share from its weakened competitors.

Another positive, according to Morgans, is the company’s liquidity. It estimates that Corporate Travel Management has sufficient liquidity to last it until the end of FY 2022.

Should you invest?

While I do think Morgans makes some great points and feel Corporate Travel Management’s shares look good value, I would prefer to wait until the crisis passes before investing in the travel sector.

More reading

• Why BHP, Corporate Travel, Harvey Norman, & Nick Scali shares are pushing higher
• Top brokers name 3 ASX 200 shares to buy today
• Top brokers name 3 ASX shares to buy next week
• Top brokers have named 3 ASX shares to buy today
• Here are easy ways to diversify your ASX portfolio

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, Helloworld Limited, and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. 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.

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The MotorCycle Holdings Ltd (ASX: MTO) share price is today pushing higher as the company provided a trading update regarding the effects of COVID-19. At the time of writing, the Motorcycle Holdings share price is up 1.52% to $1.67 on the news.

What does MotorCycle Holdings do?

Founded in 1989, MotorCycle Holdings is an Australian-based motorcycle dealership and accessories group. The company has 48 franchises and operates throughout locations in Queensland, New South Wales, Victoria, and the Australian Capital Territory.

While MotorCycle Holdings’ core business consists of the ownership and operation of motorcycle dealerships and retail accessories outlets, it also owns and operates a rider training school and a motorcycle repair business that performs smash repair work for insurers.

In October 2017, the group acquired Cassons Pty Ltd and now also operates a motorcycle accessories wholesaling business.

Trading update

Motorcycle Holdings has provided a trading update regarding the impact of the global COVID-19 pandemic on its operations. The company first experienced issues from the pandemic in March, which aided its qualification for the JobKeeper program alongside its reduced turnover in April.

However, the company reports that the recent stage 4 restrictions in Melbourne have impacted operations in 6 of their stores. Approximately 100 staff are affected, 70% of whom are covered by JobKeeper. In some good news, the stores will remain open to fulfil contactless ‘click and collect’ and online sales orders. However, the company advises that sales may be impacted by up to $9 million over the 6-week period. Furthermore, Cassons sales into Melbourne may also be impacted by up to $1 million.

Despite this news, stores in other states have reportedly continued to trade strongly and enjoy high levels of demand.

What now for MotorCycle Holdings

In spite of the news, the MotorCycle Holdings share price has pushed higher today, with the company’s shares up an impressive 180% from their lows in March this year. Shareholders of MotorCycle holdings will be hoping that the second wave of COVID-19 cases passes quickly and business is able to return to normal. The news of the restrictions saw the MotorCycle Holdings share price drop sharply at the beginning of the week.

Nevertheless, the company’s liquidity remains sound, with MotorCycle Holdings reporting its cash on hand exceeds $40 million, with its cash position improving thanks to strong trading in recent weeks.

More reading

• The Hub24 share price rocketed 43% higher in July. Here’s why…
• Deepening partnership with Telstra fails to excite the Dubber share price
• Why these ASX tech shares are skyrocketing
• Why the Tubi share price is spiralling today
• Here’s why the intelliHR share price is up 170% today

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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The Hub24 Ltd (ASX: HUB) share price rocketed 43.44% higher in July, placing the fintech company among the top earners on the All Ordinaries (INDEXASX: XAO). By comparison, the All Ords gained 0.9% in July. Like most ASX shares, the Hub24 share price took a big hit during the bear market resulting from the onset of COVID-19. The share price tumbled 41% from 26 February through to 16 March. From there, the Hub24 share price gained a stellar 108% by the time the closing bell rang on 31 July.

Year to date, the company’s share price is up nearly 27%, giving it a market capitalisation of $885 million.

What does Hub24 do?

Hub24 Ltd (formerly known as Investorfirst Limited) is an ASX-listed fintech company. It leverages technology to connect advisers and their clients through wealth management solutions. Hub24 is a fully-integrated solution for superannuation, investment, pension, insurance and margin lending. It’s used by advisers to unlock efficiency and add value for their clients.

The company’s history dates back to 2007. That’s the same year that Hub24 shares (as we know them today) first listed on the ASX. The company started out as Investorfirst, trading on the ASX under the ticker code INQ. In 2013, it made the move to rebrand as Hub24, in line with the name of its platform.

Why did the Hub24 share price soar in July?

The Hub24 share price took off in July despite Credit Suisse cutting its rating for the ASX fintech share at the start of the month. Credit Suisse’s rerating saw the Hub24 share price retreat by 1.3% the following day before recommencing its march higher.

Other brokers, like Morgans, retained their add rating.

The record performance indicated by company’s fourth quarter report, released on 20 July, saw the Hub24 share price continue to climb higher.

The report showed that the company continued to experience strong net inflows of $1.1 billion during the June quarter. Along with favourable market movements, this saw a 14% growth in its funds under administration (FUA), or $2.1 billion, bringing total FUA to $17.2 billion.

Average monthly net inflows during the 2020 financial year were up 26% from the previous year.

Management noted that net inflows were at record levels for a June quarter despite a weak start for the quarter.

HUB24’s market share has increased from 1.3% to 1.94% since March 2019. At the time of writing, the Hub24 share price is trading at $14.14.

More reading

• HUB24 and 2 more ASX 200 shares to watch this week
• Why Marley Spoon and these ASX shares are hitting new highs
• Market close: ASX 200 falls 0.5%
• ASX 200 down 0.5%: Sydney Airport and South32 updates, HUB24 delivers record Q4
• HUB24 share price pushes higher on record Q4 performance

Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd. The Motley Fool Australia has recommended Hub24 Ltd. 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.

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The Dubber Corp Ltd (ASX: DUB) share price could be facing a “buy the rumour, sell the fact” situation with the stock tanking this morning.

Shares in the call transcribing tech company slumped 4% to $1.22 during lunch time trade. In contrast, both the All Ordinaries (Index:^AORD) (ASX:XAO) and the S&P/ASX 200 Index (Index:^AXJO) are trading 0.3% higher.

The Dubber share price is underperforming even after management reported that its services are available to eligible to Telstra Corporation Ltd (ASX: TLS) customers.

The services were initially offered under a more limited early adopter program, although this failed to excite investors today.

Consolidating after a rally

Perhaps its because the stock has rallied by over 200% since the market’s COVID-19 low point in March.

That’s better than other small cap tech stocks like the Nearmap Ltd (ASX: NEA) share price and Audinate Group Ltd (ASX: AD8) share price.

Dubber’s platform allows conversations to be automatically transcribed and stored in the cloud. The technology can also generate alerts on critical conversation elements such as sentiment, tone and keyword mentions.

What Dubber platform does

The company claims that its affordable services will enable Telstra customers to get recordings and insights in situations that would be difficult or impossible. For instance, from mobile recording to address compliance mandates.

“Dubber is recognised globally as a cloud platform designed to provide call recording in the same scale as a telecommunications carrier provides its services,” said Dubber’s chief executive Steve McGovern.

“For businesses, the platform delivers flexible use cases which suit the end user, for example, enabling recording of all calls for compliance or for individual calls on demand for convenience.”

On the right path

The company reported a 22% increase in annual recurring revenue to $16.1 million at 30 June. It also added more than 40,000 new subscribers to take it total user base to 192,544 in the latest quarter.

Dubber recently completed a $9 million capital raise and is holding around $18 million in the bank.

If you are looking for stocks that can outperform during this reporting season, the experts at the Motley Fool have picked their favourites for FY21.

Follow the link below to find out that these stocks are.

More reading

• With global share markets soaring, here’s why it’s still a good time to buy ASX shares
• Where I would reinvest my Rio Tinto dividends
• Expert warns that record-breaking gold price is facing painful correction
• ASX 200 up 0.6%: ResMed & Scentre tumble, big four banks rise
• Overvalued or a strong buy? Nextdc and 1 more ASX growth share to watch

Brendon Lau owns shares of AUDINATEGL FPO, Nearmap Ltd., and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO and Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended AUDINATEGL FPO and Nearmap Ltd. 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.

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The buy now, pay later (BNPL) method of payment is taking the world by storm. It allows customers to pay for their purchases over installments and has rapidly shifted from being unheard of to commonplace.

The ASX tech shares behind BNPL have seen their market capitalisations soar as the coronavirus pandemic set in, with more and more customers choosing this payment method.

Let’s look at how each of the major BNPL companies have grown. 

Afterpay Ltd (ASX: APT)

Australia’s largest BNPL provider by market capitalisation, Afterpay has expanded globally.

Originally launched in Australia and New Zealand, Afterpay expanded to the US and UK in search of new markets. The company launched in the US in 2018 and now boasts more than 5 million customers in this market. Last year, Afterpay launched in the UK as Clearpay, with more than 1 million customers signing up in the first 12 months. 

Active merchant numbers have increased from 6000 in FY17 to over 50,000 in FY20. Afterpay has seen underlying sales grow from $560 million to $11.1 billion over the same period.

The BNPL provider had been aided by the shift to e-commerce prompted by the coronavirus pandemic – 4Q FY20 was its highest quarterly performance ever with underlying sales of $3.8 billion, a 127% increase of Q4 FY19. The Afterpay share price has reflected its success, increasing 133% this year.

Afterpay’s next step is expansion into Canada and the roll out of in-store services in the US. 

Splitit Ltd (ASX SPT)

Splitit operates a slightly different business model to Afterpay. Rather than extending credit to customers, as Afterpay does, Splitit allows customers to pay using their existing cards, with purchases split into monthly installments.

The company has partnered with Mastercard, Visa, and Stripe to improve its offering and reach. Splitit processed its first transaction in 2017.  In  the June quarter, Splitit recorded merchant sales volumes of US$65.4 million, up 260% year-on year. 

Splitit earns revenue from transaction fees on orders placed through the Splitit platform, charging on average 4% per transaction. Splitit reported gross revenue of US$2.4 million in the June quarter, up 460% year-on-year.

The Splitit share price has grown similarly, and is up 123%  so far this year. Splitit is focused on the acquisition of large merchants in target verticals to underpin sales volumes and revenue growth. Its strategic partnerships are expected to accelerate growth in future quarters. 

Sezzle Inc (ASX: SZL) 

Sezzle operates in the North American market and reports it has seen very little negative impact from the coronavirus pandemic.

Instead, the shift to online shopping prompted by the pandemic has positioned Sezzle as a key partner for merchants looking to offer more flexible payment options.

The June quarter saw record additions to active customer numbers, which grew to 326k, and active merchant numbers, which grew to 3.4k. Active customer repeat usage reached a new high of 87.5%.

According to Sezzle, a return to instore shopping has not meant a move away from online – between 29 June and 11 July retail online spend in the US was up 80.5% year on year. 

Underlying merchant sales improved 57.5% quarter-on-quarter and 348% year-on-year in the June quarter. Sezzle ended the quarter with $55.7 million in cash and subsequently conducted  an $80 million equity raising. This positions the company well to pursue its growth strategies. Investors have big expectations for the company with the Sezzle share price up 327% this year. 

Sezzle management is aiming for an annualised run rate for underlying merchant sales of over US$1 billion per annum by the end of 2020. 

Zip Co Ltd (ASX: Z1P) 

Zip targets defensive industry verticals and a slightly older, more financially savvy customer segment. Focused on the retail, home, health, automotive, and travel industries, Zip launched a “shop everywhere” product earlier this year which allows Australian app users to pay with Zip at any online store.

This allows customers to pay for everyday needs such as groceries and bills and smooth repayments over time. Zip reported $570.7 million in transaction volumes in the June quarter. This gave annualised transaction volumes of $2.3 billion for FY20. 

The economic downturn has raised some concerns over consumers’ ability to make repayments, but Zip reports it has seen a strong credit performance with net bad debts of 2.24%.

According to Zip, this is in line with expectations and significantly outperforming the market. Monthly arrears, which are a forward indicator of future losses, actually reduced between March and June, an outstanding result in the current climate.

Zip reported full year revenue of $161.2 million (up 91% on FY19) with record quarterly revenue in the June quarter of $46.4 million (up 72% year on year). The Zip share price has risen in a similar fashion, up 74% this year.  

Openpay Group Ltd (ASX: OPY)

Openpay is the most recent BNPL provider to list, debuting on the ASX last year at an offer price of $1.60 a share. Shares traded below that level until June, when they started climbing. The Openpay share price is now up 200% this year.

The increasing share price reflects Openpay’s record growth in the June quarter when active customers grew 141% and active merchants grew 52%. Total transaction value grew to a record $192.8 million for the full year, up 98.2% compared to FY19. Growth accelerated in the June quarter which saw total transaction value grow 119% over the prior corresponding period. 

Openpay operates in Australia and the UK where business surged. A major UK agreement with JD Sports was launched in May with initial trading above expectation. Openpay is set to debut its Openpay for business solution with Woolworths Group Ltd (ASX: WOW) shortly with integration well progressed. Revenue from this stream should start to flow in 1H FY21. 

Foolish takeaway

The BNPL ASX tech shares differ somewhat in their target industries, customer segments, and geographies.

What they all have in common, however, is strong growth in customer numbers and transaction values. This has driven the growth in share prices as investors anticipate accelerating revenues. 

More reading

• Top broker warns Afterpay and these ASX stocks could disappoint on profit results
• Why Mesoblast, Northern Star, PointsBet, & Splitit shares are racing higher
• Why the Splitit share price is zooming 20% higher today
• ASX 200 jumps 2% higher, Afterpay soars
• Openpay share price up 16% on partnership with MSL Solutions

Kate O’Brien 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’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. 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.

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