The Domino’s Pizza Enterprises Ltd. (ASX: DMP) share price has proved to be fairly resilient during the coronavirus crisis. Domino’s shares dropped as low as $41.66  in the early phase of the pandemic to be now trading back at $64.11. 

Domino’s felt less of an impact than other global fast-food restaurant chains and stores who were required to close and are only now beginning to re-open.

So, does the Domino’s share price offer value to investors right now?

Getting back on track as coronavirus restrictions ease

Domino’s most recent market update was in late April. It revealed that Australian store sales had been generally consistent prior to the crisis, with a small impact on local trading conditions. France, which one of the worst-hit European countries during the early phase of the crisis, had begun re-opening its stores. New Zealand stores have also re-opened and stores in Japan and Germany were able to maintain strong sales growth during the worst of the crisis.

Domino’s had a key advantage over other fast food restaurant chains during the crisis as it doesn’t typically offer patrons a sit-down service. In addition, in-store pick-ups tend to be fast as they are optimised with an online ordering app with accurate pick-up times. Dominos also does a lot of home deliveries compared to other fast-food chains.

This last update from Domino’s was 2 months ago. With lockdown restrictions easing in its operating markets, I think that trading conditions have likely picked up further.

Medium-term growth outlook

Domino’s did not provide any short-term guidance in its April update. However, it’s anticipating solid growth over the medium term. It forecasts new store openings to be in the range of 7% to 9% per year and store sales growth to be between 3% to 6% per year.

So, are Domino’s shares in the buy zone right now?

The Domino’s share price regained all its losses during the early phases of the pandemic. It is also trading close to 12-month highs, so it’s not cheap from a short-term perspective. However, it’s important to note that it is currently trading well below its all-time peak in mid-2016.

I believe there’s strong potential for Domino’s shares to increase over the next 5 years through growing sales and a strong pipeline of future store openings.

So, despite some possible short-term headwinds due to the coronavirus, I believe its share price is a buy right now.

More reading

• 2 ASX shares to buy for beginners
• UBS picks the best ASX retail stocks for the post COVID-19 world
• Investing $1,000 into these ASX 200 shares could be a smart move
• Top brokers name 3 ASX 200 shares to sell next week
• 3 five-star ASX shares I would buy today

Motley Fool contributor Phil Harpur owns shares of Domino’s Pizza Enterprises Limited. The Motley Fool Australia has recommended Domino’s Pizza Enterprises 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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At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) looks set to end its positive run. The benchmark index is currently down a disappointing 1.3% to 5,914.6 points.

Here’s what happening on the market today:

227,700 jobs lost in May.

The ASX 200 has come under pressure after the Australian Bureau of Statistics released its unemployment data. According to the release, Australia lost a further 227,700 jobs in May, bringing the total number of unemployed people to 927,000. This has lifted the unemployment rate to 7.1%, compared to 6.4% in April and 5.2% in March.

Bank shares tumble.

A combination of this news and U.S. futures dropping notably lower appears to be weighing heavily on the banks today. All the big four banks are deep in the red at lunch and acting as a drag on the ASX 200. The worst performer in the group is the Westpac Banking Corp (ASX: WBC) share price with a 2.3% decline.

Ord Minnett increases Afterpay price target.

The Afterpay Ltd (ASX: APT) share price could still go higher from here according to one leading broker. A note out of Ord Minnett this morning reveals that its analysts have retained their buy rating and almost doubled their price target to $64.70. It believes Afterpay could have almost 10 million active customers on its platform by the end of the financial year. The Afterpay share price is up 1% to $58.34 at the time of writing.

Best and worst ASX shares.

The best performer on the ASX 200 on Thursday has been the A2 Milk Company Ltd (ASX: A2M) share price with a 3.5% gain. Earlier this week analysts at UBS suggested the infant formula company might outperform its guidance in FY 2020. Going the other way, the worst performer is the AP Eagers Ltd (ASX: APE) share price with a 5.5% decline on the back of no news.

More reading

• Australian unemployment jumps to 7.1%
• Splitit share price rockets 33% on new Mastercard deal
• Has the Afterpay share price become too expensive to buy?
• Why A2 Milk, Afterpay, Mesoblast, and Temple & Webster are pushing higher
• 2 ASX shares to buy for beginners

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of A2 Milk and 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.

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The Splitit Ltd (ASX: SPT) share price is on the rise today after the buy now, pay later (BNPL) provider announced a partnership with Mastercard. The multi-year agreement is intended to accelerate the global adoption of Splitit’s instalment solution. 

At the time of writing, the Splitit share price is up by a whopping 33.33% to 88 cents per share.

What does Splitit do?

Splitit provides a payment method solution that allows customers to pay for purchases with an existing debit or credit card by splitting the cost into monthly payments. Unlike competitor Afterpay Ltd (ASX: APT), Splitit does not itself extend credit to customers. Its solution enables merchants to offer customers an easy way to pay for purchases in monthly instalments with instant approval.

What does the Mastercard agreement mean for Splitit? 

The agreement with Mastercard allows Splitit to integrate its instalment solution with Mastercard’s suite of technology as a network partner. This will enable merchants to deliver seamless and secure customer checkout experiences, both in person and online. 

Commenting on the new agreement, Splitit CEO Brad Paterson stated:

This is a fantastic way to broaden distribution of our solution, leveraging Mastercard’s incredible global reach, and build out a range of instalment services. It’s a major plank in our strategy to grow through strategic partnerships and make Splitit a household name.

Splitit and Mastercard will jointly develop instalment and related products. There are plans to launch pilots across 3 markets ahead of a global rollout.

“The partnership with Splitit will help drive higher transaction volumes for businesses and deliver budgeting solutions in the moment customers are seeking them,” said Mastercard’s Executive Vice President of Global Merchant Solutions and Partnerships. 

How has the Splitit share price performed?

The Splitit share price has tripled since its March low. As a result, the company was added to the All Ordinaries Index (ASX: XAO) last week, following the quarterly index rebalance by S&P.

Splitit reported record monthly merchant sales volumes of US$25.8 million in May, up 39% from April and 321% compared to May 2019. Splitit’s total unique shoppers surpassed 290,000 in May, up 18% from the end of Q1 FY20.

The company also reported merchant numbers increased by 12% over the same period to 964. Its average order value also climbed, reaching US$939 in May up from US$737 in Q1 FY20. Its accelerated growth in May was driven by new large merchants onboarded in recent months. 

Foolish takeaway

BNPL providers have been among the ‘winners’ of the coronavirus pandemic, as lockdowns have seen e-commerce expansion accelerate. Merchants are also actively pursuing strategies to improve conversion rates and Splitit is seeing growth in its share of checkout. 

More reading

• ASX 200 down 1.3%: Big four banks tumble, Afterpay tipped to go higher
• Has the Afterpay share price become too expensive to buy?
• Why A2 Milk, Afterpay, Mesoblast, and Temple & Webster are pushing higher
• 2 ASX shares to buy for beginners
• Next phase of bull market could see ANZ Bank outperform Afterpay

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

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The Afterpay Ltd (ASX: APT) share price is the gift that keeps on giving; soaring an eye-watering 500% since its March lows and up 46% since its February highs. As it continues to push uncharted territory, is the Afterpay share price becoming too expensive? 

Buy now, pay later ‘land grab’ 

Buy now pay later (BNPL) players are in a ‘land grab’ for international expansion and acquiring more merchants across a broader range of sectors. In Australia alone, there are almost a dozen BNPL offerings, all with slightly differentiated products and backed by some of the biggest financial and non-financial companies. The continued merger and acquisition activity and the broadening of its international footprint will see more money flow into the sector. I believe that as long as money continues to flow into the BNPL space with companies acquired at today’s elevated valuations, the Afterpay share price is likely to stay higher.

Afterpay from a valuation perspective 

To put it simply, it’s very hard to value Afterpay let alone any fintech-related company. In FY19, the company generated $264.1 million in revenue and a net loss after tax of $43.8 million. Even if Afterpay’s FY20 revenue were to double (which it probably will), that would still value the company at 30 times revenue!

Afterpay and Zip Co Ltd (ASX: Z1P) currently have a market capitalisation of approximately $15 billion and $2.5 billion respectively. In Q3 FY20 Afterpay generated $2.6 billion in sales with 8.4 million active customers and 48,400 active merchants. In the same time period, Zip generated $1.1 billion in sales with 1.9 million active customers and 22,700 merchants.

Afterpay is 6 times bigger than Zip by market capitalisation. However, Zip’s metrics are highly relevant and after its QuadPay acquisition, within an arms reach. By comparison, Afterpay could look a little overvalued compared to Zip.  

What will power the Afterpay valuation moving forward is the speed at which it will grow its US market share. The US represents the world’s largest retail market, some 15 times larger than Australia. The company is already making significant strides forward, achieving 4.4 million active customers after 2 years in the US market. 

The power of private equity 

Tencent’s substantial shareholding says a lot about where Afterpay is going. The Chinese tech behemoth has a phenomenal track record of investing and profiting from high growth companies across a broad range of sectors. Some familiar names include a 5% stake in Tesla and 7.5% stake in Spotify. Tencent is here to make money, and it could just be the beginning for its Afterpay stake. 

Worth buying in at the current Afterpay share price?

It is very challenging to buy Afterpay at today’s prices. I would hold my Afterpay shares if I was an existing holder. However, I believe it is too expensive for new investors to buy at the current Afterpay share price. 

More reading

• Why A2 Milk, Afterpay, Mesoblast, and Temple & Webster are pushing higher
• 2 ASX shares to buy for beginners
• Why Zip Co and these All Ords shares have doubled in 12 months
• Next phase of bull market could see ANZ Bank outperform Afterpay
• 5 ASX shares that would’ve made you a fortune in 5 years

Lina Lim 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.

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The S&P/ASX 200 Index (ASX: XJO) looks set to follow the lead of U.S. markets and drop lower today. In late morning trade the benchmark index is down 1.2% to 5,918.9 points.

Four shares that have not let that hold them back today are listed below. Here’s why they are pushing higher:

The A2 Milk Company Ltd (ASX: A2M) share price has continued its positive run and climbed almost 4% to $19.83. Investors have been buying the infant formula and fresh milk company’s shares this week following a positive broker note out of UBS. According to the note, the broker has retained its buy rating and NZ$22.00 (A$20.64) price target on the infant formula company’s shares. It believes there is some upside risk to its earnings guidance for FY 2020.

The Afterpay Ltd (ASX: APT) share price is up 2% to $59.05. This morning analysts at Ord Minnett retained their buy rating and almost doubled the price target on the payments company’s shares to $64.70. It believes the buy now pay later provider will have almost 10 million active customers using its platform by the end of the financial year.

The Mesoblast limited (ASX: MSB) share price is up 2% to $4.05 despite there being no news out of the biotech company. However, next week Mesoblast will be added to the ASX 200 index. This could have led to increased demand for its shares from index tracking ETFs and fund managers with certain investment mandates.

The Temple & Webster Group Ltd (ASX: TPW) share price has jumped 9.5% to $5.49. This morning the online homewares retailer released a business update which revealed that it continued to experience strong demand in May. As a result, second half sales were up 90% on the prior corresponding period at the end of last month. Financial year to date, its operating earnings are up 668% to $7.1 million.

More reading

• Has the Afterpay share price become too expensive to buy?
• 2 ASX shares to buy for beginners
• Temple & Webster share price jumps 10% after reporting bumper sales growth
• Why Zip Co and these All Ords shares have doubled in 12 months
• Next phase of bull market could see ANZ Bank outperform Afterpay

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 Temple & Webster Group Ltd. The Motley Fool Australia owns shares of A2 Milk and AFTERPAY T FPO. The Motley Fool Australia has recommended Temple & Webster Group 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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Beginners often enter the stock market and start looking for ASX shares to buy when we are in a bull market like right now. They think that no matter what people are buying, almost everything appears to be going up in value. I first started investing after the 1987 crash, but I got really active during the dot-com bubble. For some reason, I thought Fedexing dog food around the country would be a winning formula! 

I believe that just as it did then, this bull run will come to an end and that eventually, all bubbles burst. So which shares should beginner investors consider buying in this volatile market? Should they bet on the shooting stars like Afterpay Ltd (ASX: APT)? Or maybe just hide out in bona fide blue chip shares like the Commonwealth Bank of Australia (ASX: CBA)? What is the best course of action?

First, take it easy

You’re not going to become a millionaire in a day or even a year. However, if you choose the right shares to buy, it’s possible you could become one in ten years – just not tomorrow. 

On that note, I believe Domino’s Pizza Enterprises Ltd. (ASX: DMP) is one of the stand out performers of the year so far. The Domino’s share price has beaten the S&P/ASX 200 Index (INDEXASX: XJO) over the past five years. This year it is up by 22.6% year to date. In addition, from its low point on 19 March, the Domino’s share price has risen by over 50%.

With an average 28% price increase every year over the last ten years, I think this is a solid share with a lot of strong years of growth ahead of it. 

Shares to buy for growth

I think Kogan.com Ltd (ASX: KGN) is another great ASX share for beginner investors to consider. Kogan is a highly successful eCommerce company and a great story of Australian entrepreneurialism at its best. Some investors are concerned about the impact of Amazon.com on the Kogan share price. However, I feel this is a misplaced concern. Kogan does a lot more than sell electronic devices and white goods online. 

It also sells furniture and insurance, as well as mobile phone and internet plans. Not only that, but since Kogan also manufactures its own products, the company actually sells them on Amazon!

Kogan.com has increased its sales revenues by around 14%, on average, every year over the past three years. In a period of just four years, a purchase of Kogan shares has returned its investors more than 9 times their initial investment. 

Foolish takeaway

I believe both Domino’s and Kogan shares represent solid, long-term buys for beginner investors. They are reasonably priced and offer investors a good chance of continued share price growth over time. Both companies have good track records of achievement and have proven they can survive throughout a crisis. 

More reading

• Has the Afterpay share price become too expensive to buy?
• Why A2 Milk, Afterpay, Mesoblast, and Temple & Webster are pushing higher
• Why Zip Co and these All Ords shares have doubled in 12 months
• Next phase of bull market could see ANZ Bank outperform Afterpay
• Is the Macquarie share price a solid buy today?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Amazon and Domino’s Pizza Enterprises 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 Temple & Webster Group Ltd (ASX: TPW) share price is charging higher this morning after the online furniture and homewares retailer revealed bumper sales growth during the COVID-19 lockdown.

At the time of writing, Temple & Webster shares have climbed 9.78% to $5.50 after rallying as much as 21.36% in early trade.

What did Temple & Webster announce?

The company revealed that it continues to trade strongly in the second half of FY20, with revenue growing at 90% compared to the prior corresponding period (pcp). This was driven by strong growth in April and May, which Temple & Webster attributed to behaviour shifts as consumers turned online to fulfil their furniture and homewares needs. The retailer noted that all major categories have experienced significant year-over-year growth.

This uplift in demand has led to an increase in operating leverage. While Temple & Webster reported year-to-date revenue of $151.7 million through to 31 May, up 68% on the pcp, EBITDA came in 668% higher over the same period at $7.1 million (albeit off a relatively low base).

Meanwhile, the company noted that active customers, which represents the number of unique customers who have transacted in the last 12 months, is up 68% to 440,257.

In today’s release, the retailer highlighted its capital-light business model, debt-free balance sheet, and strong positioning to capitalise on the structural shift in the furniture and homewares market to online channels. As at 31 May, the company had $29.2 million of cash on its books.

What next?

Looking forward, Temple & Webster stated that strong trading has continued in June, with revenue growth tracking at more than 100% compared to the pcp.

Commenting on today’s update, chief executive and co-founder Mark Coulter said:

“We can already see in our numbers that many of the customers who have never shopped with us before, and may be first time online shoppers in our category, have already returned and made repeat purchases. These customers are experiencing the benefits of our channel, including range, convenience and value.”

Temple & Webster expects to report its full-year FY20 results at the end of July.

More reading

• Why A2 Milk, Afterpay, Mesoblast, and Temple & Webster are pushing higher
• Why Appen and these ASX shares just hit record highs
• 3 ASX retail shares to own for the next 20 years

Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to snap its winning streak. The benchmark index is currently down 0.65% to 5,952.5 points.

Four shares that have fallen more than most today are listed below. Here’s why they are dropping lower:

The Air New Zealand Limited (ASX: AIZ) share price is down 4% to $1.46. This morning the airline operator released its earnings guidance for FY 2020. Although the New Zealand Government is now allowing the airline to slowly restart its domestic network, revenue and earnings will still be significantly lower than expected. The company is now expecting to report an underlying loss before significant items and tax of up to NZ$120 million.

The Carsales.Com Ltd (ASX: CAR) share price has fallen 2.5% to $17.56. This decline may have been driven by a broker note out of Macquarie this morning. According to the note, the broker has downgraded Carsales’ shares to a neutral rating with an $18.00 price target. It made the move on valuation grounds after a strong gain since April.

The Pendal Group Ltd (ASX: PDL) share price has dropped 3% to $6.03. This follows an announcement by Westpac Banking Corp (ASX: WBC) which reveals that it has offloaded its 9.5% stake in the fund manager. The banking giant has sold 31 million shares for an average of $5.98 per share. The bank also warned that it is undertaking a strategic review of its wealth businesses which could result in some or all of its $14 billion of funds under management with Pendal being withdrawn.

The Star Entertainment Group Ltd (ASX: SGR) share price is down 3.5% to $3.14. Earlier this week analysts at Morgan Stanley downgraded the casino and resort operator’s shares to an underweight rating with a $3.30 price target. It believes the Star is going to lose market share to Crown Resorts Ltd (ASX: CWN) when the new Crown Sydney casino opens later this year.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Westpac share price on watch after dumping its Pendal stake
• ASX 200 finishes higher by 0.8%, Carsales share price driven up by FY20 guidance
• Is the CSL share price a buy right now?
• ASX 200 down 0.1%: Carsales update impresses, a2 Milk surges higher

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has recommended carsales.com Limited and Crown Resorts 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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