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Zip Co Ltd.
(Sydney:ZIP)
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Rating:51Neutral
Price Target:
AU$2.50
▼(-0.79% Downside)
Action:Reiterated
Date:08/22/26
The score is held back primarily by financial risk factors: high leverage and negative operating/free cash flow in the latest years outweigh improved profitability. Technicals also lean soft with the stock below key moving averages and a slightly negative MACD. Offsetting these, the latest earnings call was constructive with strong FY’26 results and confident FY’27 growth and margin targets, while valuation (P/E ~28 and no dividend yield support) is only moderately supportive.
Positive Factors
Scalable customer and merchant platform
Strong transaction growth alongside a large customer and merchant base supports network effects and operating scale. Continued adoption can expand fee revenue and improve unit economics as fixed technology and platform costs are spread across more activity.
Negative Factors
High leverage limits financial flexibility
An aggressive capital structure is a material constraint for a credit services business. High leverage increases sensitivity to funding costs, refinancing conditions and credit losses, while limiting the balance-sheet capacity available to absorb adverse portfolio or macroeconomic outcomes.
Read all positive and negative factors
Positive Factors
Negative Factors
Scalable customer and merchant platform
Strong transaction growth alongside a large customer and merchant base supports network effects and operating scale. Continued adoption can expand fee revenue and improve unit economics as fixed technology and platform costs are spread across more activity.
Read all positive factors
Zip Co Ltd. (ZIP) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$3.80B
Dividend YieldN/A
Average Volume (3M)11.39M
Price to Earnings (P/E)28.1
Beta (1Y)2.64
Revenue Growth24.44%
EPS Growth46.79%
CountryAU
Employees877
SectorFinancial
Sector Strength70
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)0.09
Shares Outstanding1,245,921,800
10 Day Avg. Volume11,500,778
30 Day Avg. Volume11,385,252
Financial Highlights & Ratios
PEG Ratio0.74
Price to Book (P/B)6.12
Price to Sales (P/S)3.06
P/FCF Ratio-47.23
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$4.28Price Target Upside69.64% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)0.14
Revenue Forecast (FY)AU$1.61B
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 makes money from fees and charges associated with facilitating consumer purchases and providing merchants with an alternative payment method. A core revenue stream is merchant revenue: merchants pay Zip a fee when a customer uses Zip...
Zip Co Ltd. Earnings Call Summary
Earnings Call Date:Aug 19, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Oct 20, 2026
Earnings Call Sentiment Positive
The call highlighted many strong operational and financial achievements: double‑digit growth across key top‑line metrics, notable margin expansion (420 bps to 20%), record cash earnings (+58% to $269M), and pronounced U.S. outperformance (TTV +42.5%, revenue +44%, U.S. operating margin 25%). Management also emphasized AI adoption, product innovation and active capital returns (completed $150M buybacks and announced further buybacks). Offsets include the strategic wind‑down of New Zealand, some ANZ provisioning overlay due to macro uncertainty, interest rate/funding sensitivity and the early stage of several new product initiatives (e.g., Pay‑in‑2). Overall, positives (strong growth, profitability, funding progress and capital returns) materially outweigh the challenges, though execution and macro risks remain monitored.Positive Updates
Record Group Cash Earnings and Profitability
Group cash EBTDA rose 58% year-on-year to $269 million, marking 12 consecutive quarters of group profitability. Statutory net profit after tax increased 46% to $116 million, and underlying NPAT more than doubled.
Negative Updates
New Zealand Business Wind-Down
Management announced an orderly wind-down of the New Zealand business to sharpen focus on the Australian market, indicating a contraction of geographic footprint.
Read all updates
Q4-2026 Updates
Positive
Negative
Record Group Cash Earnings and Profitability
Group cash EBTDA rose 58% year-on-year to $269 million, marking 12 consecutive quarters of group profitability. Statutory net profit after tax increased 46% to $116 million, and underlying NPAT more than doubled.
Read all positive updates
Company Guidance
Zip's FY'27 guidance targets continued strong growth and margin expansion: U.S. TTV growth of at least 30% (July >30%), group cash EBTDA of $340m (~+26% YoY), a group cash NTM margin of 3.8%–4.0% and an operating margin of 20%–22% (up from 20% in FY'26 after a 420bp expansion). Credit and portfolio targets include managing U.S. losses within a 1.5%–2.0% of TTV range, while operational priorities emphasize scaling Pay‑in‑Z and new products and investing in the U.S. within the guidance envelope. Capital and funding initiatives disclosed to support the plan include an on‑market buyback notice of up to A$50m (after A$150m completed in FY'26), consideration of a share consolidation (AGM Nov), continued U.S. funding maturation (USD 283m warehouse established, planned ~USD 300m rated ABS to refinance), AU cost of funds ~6.4% and year‑end available cash/liquidity of $247m (operating cash inflows $257m; non‑operating outflows $148m).Zip Co Ltd. Financial Statement Overview
Summary
Income Statement
68
Positive
Balance Sheet
38
Negative
Cash Flow
27
Negative
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.35B | 1.07B | 874.02M | 688.00M | 597.65M |
| Gross Profit | 834.81M | 667.43M | 580.69M | 336.80M | 354.19M |
| EBITDA | 193.55M | 340.15M | 359.86M | -159.91M | -97.83M |
| Net Income | 116.38M | 79.89M | 3.66M | -383.74M | -1.11B |
Balance Sheet | |||||
| Total Assets | 3.87B | 3.50B | 3.18B | 3.43B | 3.42B |
| Cash, Cash Equivalents and Short-Term Investments | 432.13M | 396.23M | 357.52M | 283.11M | 303.56M |
| Total Debt | 2.76B | 2.42B | 2.42B | 3.05B | 2.88B |
| Total Liabilities | 3.19B | 2.80B | 2.78B | 3.31B | 3.10B |
| Stockholders Equity | 673.42M | 709.52M | 398.53M | 119.87M | 322.27M |
Cash Flow | |||||
| Free Cash Flow | -87.20M | -69.30M | 255.06M | -249.59M | -781.93M |
| Operating Cash Flow | -85.88M | -49.81M | 272.54M | -225.03M | -752.42M |
| Investing Cash Flow | -42.94M | -19.49M | 12.03M | -30.48M | -97.07M |
| Financing Cash Flow | 177.25M | 108.26M | -208.33M | 236.59M | 820.14M |
Zip Co Ltd. Technical Analysis
Positive
2.52
Price Trends
2.86
Positive
2.56
Positive
2.61
Positive
Market Momentum
-0.01
Negative
59.84
Neutral
39.35
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 2.52 is below the 20-day moving average (MA) of 2.69, below the 50-day MA of 2.86, and below the 200-day MA of 2.61, indicating a bullish trend. The MACD of -0.01 indicates Negative momentum. The RSI at 59.84 is Neutral, neither overbought nor oversold. The STOCH value of 39.35 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$161.35M | 10.69 | 20.23% | ― | 20.39% | -42.91% | |
52 Neutral | AU$57.72M | -1.45 | -43.76% | ― | 28.46% | 40.67% | |
51 Neutral | AU$3.80B | 28.06 | 15.91% | ― | 24.44% | 46.79% | |
51 Neutral | AU$209.52M | 7.31 | 5.04% | 2.84% | ― | -18.89% | |
50 Neutral | AU$51.11M | -4.52 | -26.13% | ― | 7.47% | 5.97% | |
50 Neutral | AU$935.76M | 8.86 | 7.72% | 6.60% | 4.20% | 85.51% |
* Financial Sector Average
AU:ZIP
Zip Co Ltd.
2.57
-1.18
-31.47%
AU:HUM
Humm Group Limited
0.41
-0.17
-29.57%
AU:WZR
Wisr Ltd.
0.03
>-0.01
-6.67%
AU:PLT
Plenti Group Ltd.
0.86
-0.43
-33.20%
AU:LFS
Latitude Group Holdings Ltd.
0.93
-0.11
-11.00%
AU:MME
MoneyMe Ltd.
0.07
-0.06
-46.67%
Zip Co Ltd. Corporate Events
Zip Co Launches On-Market Buy-Back of Ordinary Shares
Aug 20, 2026
Zip Co Ltd., an ASX-listed fintech company, offers buy-now, pay-later and digital payment services via its Zip platform, with its ordinary fully paid shares traded under the code ZIP. It operates in the consumer finance sector, targeting retail cu...
Zip Co files 2026 corporate governance statement and Appendix 4G
Aug 20, 2026
Zip Co Limited has lodged its 2026 Corporate Governance Statement and a completed Appendix 4G with the ASX, meeting disclosure obligations under Listing Rules 4.7.3, 4.7.4 and 4.10.3. The governance statement is current as of 20 August 2026 and ha...
Zip Co Delivers Record FY26 Earnings and Sets Higher FY27 Targets
Aug 20, 2026
Zip Co Ltd reported record full-year FY26 results, with cash EBTDA rising 57.9% to $268.9 million and operating margins expanding to 20.0% as total transaction volume grew 27.2% to $16.7 billion. Total income climbed 24.6% to $1.35 billion, U.S. t...
Zip Co boosts FY26 revenue and profit but keeps dividends off the table
Aug 19, 2026
Zip Co Ltd. has released its Appendix 4E and FY26 annual report, detailing a strong financial performance for the year ended 30 June 2026. The disclosure, authorised by the board, confirms audited financial statements with an unmodified opinion, u...
Zip Co appoints new company secretary to bolster ASX governance
Aug 14, 2026
Zip Co Limited, an ASX-listed digital financial services provider, offers point-of-sale credit and digital payment solutions across Australia, New Zealand and the United States. The fintech connects millions of customers to a global network of mer...
JPMorgan Ceases to Be Substantial Holder in Zip Co Ltd
Aug 11, 2026
JPMorgan Chase Co and its affiliates have disclosed that they have ceased to be a substantial holder in Zip Co Ltd as of 7 August 2026. The change reflects a series of transactions and securities lending, prime brokerage and investment management...
UBS Exits Substantial Shareholder Position in Zip Co Ltd
Jul 30, 2026
UBS Group AG and its related entities have notified Zip Co Ltd that they have ceased to be a substantial shareholder as of 28 July 2026. The change, detailed in regulatory filings, reflects adjustments in UBS’s relevant interests in Zip̵...
Zip Co sets August date and investor call for FY26 results
Jul 21, 2026
Zip Co Ltd. will release its full-year results for the period ended 30 June 2026 on 20 August 2026, accompanied by a webcast and conference call scheduled for 10:00 a.m. AEST that same day. The company has opened registration for investors and oth...
Zip Co Reports Lapse of 388,749 Performance Rights
Jul 13, 2026
Zip Co Ltd has notified the market of changes to its capital structure following the lapse of a tranche of performance rights. The company reported that 388,749 performance rights, trading under the ASX code ZIPAM, have ceased because the conditio...
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...
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.