Zip Co Ltd. (AU:ZIP)
ASX:ZIP
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Zip Co Ltd.
(Sydney:ZIP)
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Rating:54Neutral
Price Target:
AU$2.00
▼(-15.97% Downside)
Action:ReiteratedDate:04/09/26
Overall score is restrained mainly by weaker financial quality (high leverage and negative operating/free cash flow) and bearish technicals (below key moving averages with negative MACD). These are partially offset by an upbeat earnings call with upgraded margin outlook and strong profitability momentum, while valuation appears roughly neutral (P/E ~20) with no dividend support provided.
Positive Factors
Transaction & Customer Growth
Sustained high TTV and rising active customers indicate durable platform adoption and stronger merchant economics. Higher transaction frequency and scale support recurring merchant fees, better unit economics and cross-sell potential, underpinning multi-period revenue growth and network effects.
Negative Factors
Negative Operating & Free Cash Flow
Persistent negative operating and free cash flows indicate the business still relies on external financing to fund receivables and growth. Over months, weak cash conversion can constrain reinvestment, increase funding needs, and leave the firm exposed if credit markets tighten or ABS capacity contracts.
Read all positive and negative factors
Positive Factors
Negative Factors
Transaction & Customer Growth
Sustained high TTV and rising active customers indicate durable platform adoption and stronger merchant economics. Higher transaction frequency and scale support recurring merchant fees, better unit economics and cross-sell potential, underpinning multi-period revenue growth and network effects.
Read all positive factors
Zip Co Ltd. (ZIP) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$2.27B
Dividend YieldN/A
Average Volume (3M)11.39M
Price to Earnings (P/E)20.2
Beta (1Y)2.62
Revenue Growth23.69%
EPS Growth116.67%
CountryAU
Employees985
SectorFinancial
Sector Strength70
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)0.04
Shares Outstanding1,270,683,600
10 Day Avg. Volume11,500,778
30 Day Avg. Volume11,385,252
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)5.58
Price to Sales (P/S)3.69
P/FCF Ratio-57.13
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$3.57Price Target Upside49.86% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)0.09
Revenue Forecast (FY)AU$1.34B
Zip Co Ltd. Business Overview & Revenue Model
Company Description
Zip Co Limited provides digital retail finance and payments solutions to consumers, and small and medium sized merchants (SMEs) in Australia, Canada, the Czech Republic, Mexico, New Zealand, Poland, Saudi Arabia, Singapore, South Africa, Turkey, t...
How the Company Makes Money
Zip makes money primarily through a combination of merchant-related revenue and customer-related revenue generated from transactions processed on its platform. (1) Merchant fees: When a customer uses Zip to pay a merchant, Zip typically earns a fe...
Zip Co Ltd. Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Apr 17, 2026
Earnings Call Sentiment Positive
The call presented a strong set of operational and financial results with record cash earnings, robust transaction and customer growth (notably in the U.S.), material margin expansion and improved funding dynamics. Management also highlighted successful product launches, strategic partnerships (Stripe, Google), AI scaling and disciplined capital management. The primary challenges discussed centered on managing higher loss rates from longer-duration products (Pay-in-8), a modest increase in U.S. provisions, FX translation headwinds, and near-term corporate costs related to potential U.S. dual-listing. Overall, the positives — including large percentage increases in profitability metrics, substantial regional momentum, and conservative risk management measures — materially outweigh the highlighted risks.Positive Updates
Record Cash Earnings and Operating Margin Expansion
Delivered record cash earnings of $124.3 million, up 86% year-on-year, and operating margin expanded by 569 basis points to 18.7%.
Negative Updates
Higher Losses from Longer-Duration Product (Pay‑in‑8)
Pay-in-8 now represents about 20% of the portfolio and carries higher losses due to longer duration and larger average order value; management has capped Pay-in-8 at ~20% to manage risk.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Cash Earnings and Operating Margin Expansion
Delivered record cash earnings of $124.3 million, up 86% year-on-year, and operating margin expanded by 569 basis points to 18.7%.
Read all positive updates
Company Guidance
Management reconfirmed FY‑26 guidance while upgrading operating margin to greater than 18% and raising cash EBITDA as a percentage of TTV to above 1.4%, while retaining a cash net transaction margin range of 3.8–4.2% and saying H2 cash EBITDA is expected to be broadly in line with H1 (H1 cash EBITDA / cash earnings $124.3m). They expect net bad debts to remain stable in the top half of the 1.5–2.0% target range, will cap Pay‑in‑8 at ~20% of the portfolio, and continue to target U.S. TTV growth of >40% (U.S. H1 TTV >$4bn, U.S. revenue $292m; U.S. active customers +~10% YoY; customers transacting 11x/yr up 20%). Key H1 reference metrics underpinning the outlook: group TTV $8.4bn (+34%), 55m transactions, active customers 6.6m (+4.1%), cash gross profit $314.3m (+33.5%), cash EBITDA $124.3m (+85.6%), statutory NPAT $52.4m (+127.6%), operating margin 18.7% (↑569bps), available cash and liquidity $239m, completed $100m buyback (34.9m shares at $2.86), and funding progress including AU $400m 2‑yr ABS at BBSW+1.37%, $300m 5‑yr ABS at BBSW+1.62% and a $283m U.S. warehouse facility.Zip Co Ltd. Financial Statement Overview
Summary
Income Statement
65
Positive
Balance Sheet
50
Neutral
Cash Flow
40
Negative
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.23B | 1.07B | 874.02M | 688.00M | 597.65M | 394.37M |
| Gross Profit | 562.58M | 667.43M | 580.69M | 336.80M | 354.19M | 166.93M |
| EBITDA | 180.09M | 340.15M | 359.86M | -159.91M | -97.83M | -324.28M |
| Net Income | 109.24M | 79.89M | 3.66M | -383.74M | -1.11B | -678.15M |
Balance Sheet | ||||||
| Total Assets | 3.98B | 3.50B | 3.18B | 3.43B | 3.42B | 3.33B |
| Cash, Cash Equivalents and Short-Term Investments | 541.56M | 396.23M | 357.52M | 283.11M | 303.56M | 331.71M |
| Total Debt | 2.55B | 2.42B | 2.42B | 3.05B | 2.88B | 2.25B |
| Total Liabilities | 3.32B | 2.80B | 2.78B | 3.31B | 3.10B | 2.32B |
| Stockholders Equity | 664.10M | 709.52M | 398.53M | 119.87M | 322.27M | 1.01B |
Cash Flow | ||||||
| Free Cash Flow | -9.93M | -69.30M | 255.06M | -249.59M | -781.93M | -901.31M |
| Operating Cash Flow | -8.82M | -49.81M | 272.54M | -225.03M | -752.42M | -887.91M |
| Investing Cash Flow | -19.98M | -19.49M | 12.03M | -30.48M | -97.07M | -8.25M |
| Financing Cash Flow | 88.35M | 108.26M | -208.33M | 236.59M | 820.14M | 1.19B |
Zip Co Ltd. Technical Analysis
Neutral
2.38
Price Trends
1.97
Negative
2.55
Negative
3.17
Negative
Market Momentum
-0.05
Negative
51.48
Neutral
77.71
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:ZIP, the sentiment is Neutral. The current price of 2.38 is above the 20-day moving average (MA) of 1.61, above the 50-day MA of 1.97, and below the 200-day MA of 3.17, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 51.48 is Neutral, neither overbought nor oversold. The STOCH value of 77.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AU:ZIP.
Zip Co Ltd. Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
64 Neutral | AU$149.41M | 6.29 | 72.15% | ― | 19.38% | ― | |
56 Neutral | AU$323.11M | 6.25 | 7.83% | 2.84% | 7.64% | 463.49% | |
54 Neutral | AU$2.27B | 20.16 | 15.91% | ― | 23.69% | 116.67% | |
52 Neutral | AU$94.60M | 2.59 | 23.10% | ― | -0.51% | ― | |
52 Neutral | AU$951.36M | 11.50 | 7.72% | 6.60% | 14.81% | ― | |
43 Neutral | AU$66.64M | -1.10 | -43.76% | ― | -9.56% | -392.31% |
* Financial Sector Average
AU:ZIP
Zip Co Ltd.
1.79
0.33
22.60%
AU:HUM
Humm Group Limited
0.64
0.11
21.44%
AU:PNC
Pioneer Credit Ltd
0.60
0.19
48.75%
AU:PLT
Plenti Group Ltd.
0.82
0.07
9.33%
AU:LFS
Latitude Group Holdings Ltd.
0.92
-0.17
-15.82%
AU:MME
MoneyMe Ltd.
0.08
-0.05
-36.92%
Zip Co Ltd. Corporate Events
Bank of America Ceases to Be Substantial Shareholder in Zip Co
Apr 8, 2026
Bank of America Corporation and its related entities have notified Zip Co Ltd that they have ceased to be substantial shareholders in the company as of 2 April 2026. The change, detailed in a substantial holder notice lodged with regulators, indic...
Zip Co Sets Key FY26 Financial Reporting Dates
Apr 2, 2026
Zip Co Ltd has released its financial reporting calendar for the remainder of FY26, outlining key dates for investors and stakeholders tracking the company’s performance. The company plans to provide a third-quarter FY26 results update on 17...
Zip Co Continues On-Market Share Buy-Back, Lifting Total to Over 12 Million Shares
Apr 1, 2026
Zip Co Limited has continued its on-market share buy-back program, reporting that it repurchased a further 1,586,860 ordinary fully paid shares on the previous trading day. This lifts the cumulative total bought back under the program to 12,199,95...
Zip Co Provides Daily Update on Ongoing On‑Market Share Buy‑Back
Mar 30, 2026
Zip Co Ltd has updated the market on progress of its previously announced on-market share buy-back program for its ordinary fully paid shares traded under the ASX code ZIP. The company reported that it has repurchased a total of 10,752,143 shares ...
Zip Co Continues Daily On-Market Share Buy-Back Program
Mar 29, 2026
Zip Co Ltd has disclosed updated details of its on-market share buy-back program for its ordinary fully paid shares listed on the ASX under the code ZIP. The company is pursuing this buy-back as part of its ongoing capital management strategy, sig...
Zip Co Updates Market on Progress of On‑Market Share Buy-Back
Mar 25, 2026
Zip Co Limited has notified the market of an update to its ongoing on‑market share buy-back program for its ordinary fully paid shares. The company reported that a cumulative 9,397,229 shares had been repurchased prior to the latest trading ...
Australian Retirement Trust Ceases to Be Substantial Holder in Zip Co
Mar 25, 2026
Australian Retirement Trust Pty Ltd has notified Zip Co Ltd that it has ceased to be a substantial holder in the company as of 23 March 2026. The change indicates that the superannuation investor has reduced its holding below the substantial share...
Zip Co Updates Market on Progress of On-Market Share Buy-Back
Mar 24, 2026
Zip Co Ltd has provided an updated notification regarding its ongoing on-market share buy-back program for its ordinary fully paid shares. The company reported that it had repurchased a cumulative 8,344,229 shares prior to the most recent trading ...
Zip Co Updates Market on Progress of On‑Market Share Buy‑Back
Mar 22, 2026
Zip Co Ltd has disclosed an update to its on‑market share buy‑back program involving its ordinary fully paid shares listed on the ASX under the ticker ZIP. The company, registered under ACN 139 546 428, continues to execute buy‑b...
Zip Co Continues On‑Market Share Buy‑Back Programme
Mar 19, 2026
Zip Co Ltd. has provided an updated notification to the ASX regarding its ongoing on‑market share buy‑back program for its ordinary fully paid shares, ZIP. The company reported that a total of 4,679,430 shares had been repurchased befo...
Zip Co Updates Market on Progress of On-Market Share Buy-Back
Mar 18, 2026
Zip Co Ltd has updated the market on its ongoing on-market share buy-back program, confirming that it repurchased 1,246,633 ordinary fully paid shares in the most recent trading day. This brings the total number of shares bought back under the cur...
Zip Co Updates Market on Daily On‑Market Share Buy‑Back
Mar 16, 2026
Zip Co Ltd has updated the market on its ongoing on-market share buy-back program for its ordinary fully paid shares. The company reported that 1,443,333 shares were repurchased on the previous trading day, with no shares bought back before that d...
Australian Retirement Trust Ceases to Be Substantial Holder in Zip Co
Mar 13, 2026
Australian superannuation investor Australian Retirement Trust has notified Zip Co Ltd that it has ceased to be a substantial shareholder in the company as of 11 March 2026. The change, disclosed via a statutory substantial holder notice, indicate...
Zip Co CEO Cynthia Scott Reshapes Equity Holdings as Performance Rights Vest
Mar 13, 2026
Zip Co Ltd has disclosed changes to CEO Cynthia Scott’s interests in the company’s securities, detailing a conversion of previously held performance rights into fully paid ordinary shares. The adjustments involve both direct and indire...
Zip Co Issues 1.5 Million New Shares on Conversion of Unquoted Securities
Mar 13, 2026
Zip Co Limited has notified the market of the issue of a total of 1,508,159 ordinary fully paid shares following the exercise or conversion of previously unquoted options or other unquoted convertible securities. The new shares, issued in two tran...
Zip Co Director Kevin Moss Increases Indirect Shareholding
Feb 27, 2026
Zip Co director Kevin Moss, whose interests are held indirectly through the Kevin Moss and Magdalena Dragon-Moss Revocable Trust, has increased his holding in the company. The trust acquired 20,325 fully paid ordinary shares in an on-market trade ...
Zip Co Director Andrew Stevens Lifts Indirect Shareholding
Feb 22, 2026
Zip Co director Andrew Stevens has increased his indirect holding in the company through Alochan Pty Limited as trustee for Sharetrust. Following an on-market purchase of 16,600 fully paid ordinary shares for $31,208 on 20 February 2026, his total...
Zip Co Director Meredith Scott Increases Shareholding in On-Market Trade
Feb 22, 2026
Zip Co Ltd director Meredith Scott has increased her direct holding in the company through an on-market purchase of fully paid ordinary shares. Following the transaction, dated 20 February 2026, her stake rose from 55,144 to 60,671 shares, while h...
Zip Co Director Diane Smith-Gander Lifts Indirect Shareholding via On-Market Purchase
Feb 22, 2026
Zip Co director Diane Smith-Gander has increased her indirect holding in the company through her superannuation fund vehicle, DSG Pty Ltd as trustee for the DSG Superannuation Fund. As both a director of the trustee and a member of the fund, she h...
Zip Co director Cynthia Scott increases equity stake via new share purchases
Feb 22, 2026
Zip Co has disclosed a change in the equity holdings of director Cynthia Scott, detailing acquisitions of fully paid ordinary shares on 20 February 2026. The filing outlines her extensive existing portfolio of performance rights and shares, signal...
Zip Co Launches On-Market Share Buyback Program
Feb 19, 2026
Zip Co Ltd. has announced a new on-market share buyback of its ordinary fully paid shares listed on the ASX under the code ZIP. The program, disclosed through an Appendix 3C filing dated 20 February 2026, signals that the company intends to repurc...
Zip Co launches up to $50m on-market share buy-back
Feb 19, 2026
Zip Co Limited has announced an on-market share buy-back of up to $50 million of its ordinary shares, with the program expected to start around 6 March 2026 and run for up to 12 months. The scale and timing of purchases will depend on market condi...
Zip Co Issues 172,695 New Shares on Conversion of Unquoted Securities
Jan 14, 2026
Zip Co Ltd has notified the market of the issue of a total of 172,695 new ordinary fully paid shares following the exercise or conversion of previously unquoted options or other unquoted convertible securities. The new shares, issued on 17 and 22 ...
Zip Co Issues 2.67 Million Unquoted Performance Rights Under Employee Incentive Scheme
Jan 14, 2026
Zip Co Limited has notified the market of the issue of 2,670,063 unquoted performance rights under its employee incentive scheme, with an issue date of 23 December 2025. The new securities, which are not intended to be quoted on the ASX, underscor...
Zip Co Sets Date and Investor Call for 1H FY26 Results
Jan 11, 2026
Zip Co Limited has scheduled the release of its half-year financial results for the period ended 31 December 2025 on 19 February 2026, and will host a conference call and webcast that morning at 10:00am AEDT to discuss the figures. Investors and o...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.