The boom in installment services - how to make money in a grow | 🚀 Robin Rocket

The boom in installment services - how to make money in a growing market?

Platforms that allow consumers to make purchases on a buy now - pay later basis are gaining popularity. This was largely due to the pandemic. Consider the prospects and key players in this area.

Growth factors:

• During the COVID-19 pandemic, many people faced financial hardship due to job loss or pay cuts. Buyers began to avoid large one-time purchases for fear of overburdening the budget.

• The flexibility of payments provided by installment services attracts a large number of buyers. Currently, about 56% of Americans have used this service at least once.

• The income of the providers of hire purchase directly depends on the number of transactions, and, probably, many consumers, given the choice, will give preference to large and well-known services with a large list of seller-partners.

Key ideas in the sector:

Affirm $AFRM
Target price from Mizuho - $150, upside potential +21%
Affirm is one of the largest installment services in the US and has partnered with companies such as Amazon $AMZN, Apple $AAPL, and Shopify $SHOP to create their own installment services.

PayPal $PYPL
Target price from Morgan Stanley - $340, upside potential +22%

Square $SQ
Target price from JPMorgan - $320, upside potential +22%

In addition, small Australian installment plan providers may have growth potential due to their relatively low valuation and possible absorption by large players, as happened with Afterpay:

Sezzle $SZL
Zip $Z1P

Not an investment recommendation.