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Zip Co Ltd.
(Sydney:ZIP)
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Rating:51Neutral
Price Target:
AU$3.50
▲(47.06% Upside)
Action:Reiterated
Date:06/18/26
The score is driven primarily by mixed financial performance: solid revenue growth and operating margins are outweighed by weak cash flow and still-high leverage. Technicals are supportive in the short term but look overextended, while valuation (P/E 34.353) provides limited downside support.
Positive Factors
Revenue & Gross Margin
Sustained revenue growth paired with a 62.28% gross margin indicates product pricing power and scale in core BNPL and merchant services. This combination supports durable unit economics and capacity to invest in product and merchant acquisition over the next 2–6 months.
Negative Factors
Weak Cash Flow
Persistently negative operating and free cash flows constrain internal funding for growth and force reliance on external financing. Over 2–6 months this limits ability to invest in merchant partnerships, increases refinancing risk, and heightens sensitivity to funding cost swings.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue & Gross Margin
Sustained revenue growth paired with a 62.28% gross margin indicates product pricing power and scale in core BNPL and merchant services. This combination supports durable unit economics and capacity to invest in product and merchant acquisition over the next 2–6 months.
Read all positive factors
Zip Co Ltd. (ZIP) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$3.85B
Dividend YieldN/A
Average Volume (3M)11.39M
Price to Earnings (P/E)36.4
Beta (1Y)2.73
Revenue Growth28.84%
EPS GrowthN/A
CountryAU
Employees985
SectorFinancial
Sector Strength70
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)0.08
Shares Outstanding1,245,921,800
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$3.38Price Target Upside42.02% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)0.13
Revenue Forecast (FY)AU$1.57B
Zip Co Ltd. Business Overview & Revenue Model
Company Description
Zip Co Limited delivers digital financial and payment solutions to a diverse client base, including individual consumers and small-to-medium sized businesses (SMEs). Its extensive global presence spans Australia, Canada, the Czech Republic, Mexico...
How the Company Makes Money
Zip primarily generates revenue from two sides of its platform: merchants and consumers. On the merchant side, Zip earns fees from merchants when customers pay using Zip at checkout; these merchant fees are typically the largest revenue driver and...
Zip Co Ltd. Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 20, 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
Positive
2.38
Price Trends
2.55
Positive
2.22
Positive
2.89
Positive
Market Momentum
0.19
Negative
64.87
Neutral
76.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:ZIP, the sentiment is Positive. The current price of 2.38 is below the 20-day moving average (MA) of 2.80, below the 50-day MA of 2.55, and below the 200-day MA of 2.89, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 64.87 is Neutral, neither overbought nor oversold. The STOCH value of 76.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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% | |
56 Neutral | AU$237.28M | 8.48 | 5.04% | 2.84% | ― | -18.89% | |
56 Neutral | AU$135.01M | 9.25 | 20.23% | ― | 20.39% | -42.91% | |
52 Neutral | AU$105.73M | 6.99 | 23.10% | ― | 7.36% | ― | |
52 Neutral | AU$951.36M | 10.18 | 7.72% | 6.60% | 8.89% | 334.62% | |
51 Neutral | AU$3.85B | 36.38 | 15.91% | ― | 28.84% | ― | |
43 Neutral | AU$63.41M | -1.31 | -43.76% | ― | 17.04% | -121.43% |
* Financial Sector Average
AU:ZIP
Zip Co Ltd.
3.09
<0.01
0.32%
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0.47
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0.67
0.16
30.39%
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0.74
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-17.78%
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Latitude Group Holdings Ltd.
0.92
-0.13
-12.44%
AU:MME
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0.08
-0.08
-51.25%
Zip Co Ltd. Corporate Events
Zip Co boosts director equity holdings under NED plan
Jul 1, 2026
Zip Co Ltd reported a change in director Meredith Scott’s interests, reflecting the issue of additional restricted rights under the company’s Non-Executive Director (NED) Equity Plan. Following the transaction on 29 June 2026, Scott...
Zip Co issues new unquoted equity under employee incentive schemes
Jul 1, 2026
Zip Co Ltd has notified the market of the issue of new unquoted equity securities under its employee incentive schemes. The company is issuing 33,872 restricted rights (ZIPAN) and 213,283 performance rights (ZIPAM), both dated 29 June 2026, which ...
Zip Co Completes AUD 50m On-Market Share Buy-Back
Jun 28, 2026
Zip Co Ltd has completed an on-market share buy-back of its ordinary fully paid shares on the ASX, repurchasing a total of 24,761,784 securities. The company paid aggregate consideration of about AUD 50 million for the buy-back, which was conducte...
Zip Co Updates Market on Progress of On-Market Share Buy-Back
Jun 25, 2026
Zip Co Ltd has provided an updated notification to the ASX regarding its ongoing on-market share buy-back of ordinary fully paid shares under code ZIP. The company reported that, as of the latest daily filing dated 26 June 2026, it had repurchased...
Zip Co Continues Daily On-Market Share Buy-Back Program
Jun 22, 2026
Zip Co Ltd has continued its on-market share buy-back program, targeting its ordinary fully paid shares traded under the ASX code ZIP. The company lodged an updated Appendix 3C with the exchange, confirming ongoing activity under the program.The u...
Zip Co Continues On-Market Share Buyback Programme
Jun 18, 2026
Zip Co Ltd has reported ongoing activity under its on-market share buyback program, targeting its ordinary fully paid shares listed on the ASX. The latest update, dated 19 June 2026, confirms that the company continues to repurchase stock as part ...
Zip Co Continues On-Market Buy-Back With Daily Share Repurchases
Jun 9, 2026
Zip Co Ltd has provided an update on its ongoing on-market share buy-back program for its ordinary fully paid shares traded under the ASX code ZIP. The company reported that, as of the latest daily notification dated 10 June 2026, a cumulative 17,...
Zip Co Updates Market on Ongoing On‑Market Share Buy-Back
Jun 4, 2026
Zip Co Ltd has provided an updated notification to the ASX regarding its ongoing on-market share buy-back of ordinary fully paid shares. The company reported that a total of 16,529,322 shares had been repurchased before the previous trading day, w...
Zip Co steps up on‑market share buy‑back program
Jun 3, 2026
Zip Co Ltd has reported an on‑market share buy‑back program involving its ordinary fully paid shares traded under the ASX code ZIP. The company disclosed that, as of the latest update, a total of 16,379,150 shares had been repurchased ...
Zip Co Cancels 2.17 Million Shares After On‑Market Buy-Back
May 22, 2026
Zip Co Ltd has cancelled 2,174,034 ordinary fully paid shares following an on-market buy-back completed on 14 May 2026. The reduction in issued capital signals continued use of buy-backs as a capital management tool, which can support earnings per...
Zip Co secures Australian rights to Zip brand in settlement with Firstmac
May 21, 2026
Zip Co Ltd has secured rights to continue using the Zip brand in Australia after reaching a settlement with Firstmac, under which it will acquire the registered ZIP trademark. The agreement ensures ongoing use of the Zip name for its Australian pr...
Zip Co to Rebrand Australian Business After High Court Trademark Ruling
May 13, 2026
Zip Co Limited will be forced to stop using the “Zip” trade mark for its products and services in Australia following a High Court judgment in a trademark infringement case brought by Firstmac Limited. The company has 28 days, or anoth...
Zip Co Continues On-Market Buy-Back, Lifting Cumulative Repurchases
May 12, 2026
Zip Co Ltd, the ASX-listed fintech behind the ZIP ordinary fully paid shares, operates in the digital payments and consumer finance space with a focus on buy-now, pay-later services. Its platform connects consumers and merchants, offering flexible...
Zip Co releases Macquarie Conference presentation with April trading update
May 7, 2026
Zip Co Limited has lodged the presentation to be delivered by Group CEO and Managing Director Cynthia Scott at the Macquarie Group Conference, which includes an update on trading conditions and performance for April 2026. The materials, made avail...
Zip Co Continues On-Market Share Buy-Back Program
May 4, 2026
Zip Co Ltd has disclosed an update on its on-market share buy-back, confirming that a total of 15,020,167 ordinary fully paid shares had been repurchased prior to the latest reporting date. The company reported that it bought back an additional 13...
Zip Co Continues On-Market Share Buy-Back Program
Apr 28, 2026
Zip Co Ltd has been actively executing an on-market share buy-back of its ordinary fully paid shares as part of its capital management strategy. The company has accumulated a total of 14,608,886 shares repurchased prior to the latest reporting dat...
Zip Co Continues On-Market Buy-Back with Daily Share Purchases
Apr 26, 2026
Zip Co Ltd has updated the market on its ongoing on-market share buy-back program for its ordinary fully paid shares. The ASX-listed fintech reported that, as of the latest notification dated 27 April 2026, it had repurchased a cumulative 13,811,8...
Zip Co lifts FY26 earnings guidance after record third-quarter profit
Apr 16, 2026
Zip Co reported a strong third quarter for fiscal 2026, with record cash EBTDA of $65.1 million, a 41.5% year-on-year increase, and operating margin expanding to 19.4%. Total transaction volume rose 22.4% to $4.0 billion, total income climbed 20.2...
Zip Co Cancels 307,599 Unvested Performance Rights
Apr 15, 2026
Zip Co Ltd has announced the lapse of 307,599 performance rights, which have ceased because the conditions attached to those conditional rights were not satisfied or became incapable of being met as of March 18, 2026. The cessation slightly reduce...
Zip Co Issues 366,686 New Ordinary Shares From Converted Unquoted Securities
Apr 15, 2026
Zip Co Ltd has notified the market of the issue of 366,686 ordinary fully paid shares following the exercise or conversion of previously unquoted securities. The new shares, dated March 31, 2026, indicate a further crystallisation of unquoted opti...
Zip Co Issues 334,048 Unquoted Performance Rights Under Employee Scheme
Apr 15, 2026
Zip Co Ltd has disclosed the issue of 334,048 unquoted performance rights under its employee incentive scheme, with an effective issue date of March 24, 2026. The new securities, which will not be quoted on the ASX, form part of Zip’s broade...
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...
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.