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Zip Co Ltd.
(Sydney:ZIP)
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Rating:51Neutral
Price Target:
AU$2.00
â–¼(-21.26% 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
Strong growth and scale
Rapid transaction growth combined with a large customer and merchant network supports durable platform economics. Greater scale can deepen network utility, improve data-driven underwriting and spread technology costs across more activity, strengthening competitive positioning over the next several quarters.
Negative Factors
High financial leverage
The aggressive capital structure reduces financial flexibility for a credit services business and increases sensitivity to funding conditions and portfolio performance. Higher leverage can constrain investment or capital returns and make adverse credit or funding developments more damaging to earnings stability.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong growth and scale
Rapid transaction growth combined with a large customer and merchant network supports durable platform economics. Greater scale can deepen network utility, improve data-driven underwriting and spread technology costs across more activity, strengthening competitive positioning over the next several quarters.
Read all positive factors
Zip Co Ltd. (ZIP) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$2.69B
Dividend YieldN/A
Average Volume (3M)16.03M
Price to Earnings (P/E)23.6
Beta (1Y)2.56
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. Volume11,827,333
30 Day Avg. Volume16,025,471
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$4.18Price Target Upside64.70% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)0.15
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 23, 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
Neutral
2.54
Price Trends
2.40
Negative
2.57
Negative
2.45
Negative
Market Momentum
-0.08
Negative
48.09
Neutral
86.12
Negative
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 2.54 is above the 20-day moving average (MA) of 2.11, above the 50-day MA of 2.40, and above the 200-day MA of 2.45, indicating a neutral trend. The MACD of -0.08 indicates Negative momentum. The RSI at 48.09 is Neutral, neither overbought nor oversold. The STOCH value of 86.12 is Negative, 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% | |
58 Neutral | AU$137.38M | 9.31 | 20.23% | ― | 20.39% | -42.91% | |
54 Neutral | AU$199.55M | 12.34 | 2.93% | 2.56% | -4.83% | -55.49% | |
54 Neutral | AU$54.65M | -7.21 | -16.10% | 3.00% | 18.86% | 17.31% | |
52 Neutral | AU$50.78M | -1.25 | -41.92% | ― | 28.46% | 40.67% | |
51 Neutral | AU$2.69B | 23.58 | 17.40% | ― | 24.44% | 46.79% | |
50 Neutral | AU$826.59M | 7.57 | 8.74% | 13.21% | 4.20% | 85.51% |
* Financial Sector Average
AU:ZIP
Zip Co Ltd.
2.16
-2.48
-53.45%
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0.39
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AU:WZR
Wisr Ltd.
0.03
<0.01
3.33%
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Plenti Group Ltd.
0.75
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-42.25%
AU:LFS
Latitude Group Holdings Ltd.
0.80
-0.22
-21.98%
AU:MME
MoneyMe Ltd.
0.06
-0.05
-43.64%
Zip Co Ltd. Corporate Events
Zip Co Performance Rights Lapse Trims Potential Future Dilution
Oct 12, 2026
Zip Co Limited has reported changes to its issued capital, notifying the cessation of a parcel of performance rights trading under ASX code ZIPAM. The company advised that 50,991 performance rights lapsed on 15 September 2026 after the conditional...
Zip Co Issues New Shares Following Conversion of Unquoted Securities
Oct 12, 2026
Zip Co Limited has notified the market of the issue of unquoted equity securities following the exercise or conversion of existing options or other convertible instruments. The company will transfer a total of 940,474 ordinary fully paid shares on...
Zip Co Continues On‑Market Share Buy‑Back With Daily Update
Oct 1, 2026
Zip Co Ltd. has updated the market on its ongoing on‑market share buy‑back of ordinary fully paid shares, confirming that a cumulative 6,615,001 shares had been repurchased prior to the latest trading day. The company reported that a f...
Zip Co Continues On-Market Share Buy-Back With Daily Update
Sep 28, 2026
Zip Co Ltd has provided an update to its on-market share buy-back program for its ordinary fully paid shares listed on the ASX under the code ZIP. The company reported that a total of 6,015,001 shares had been repurchased before the previous day, ...
Zip Co details director Cynthia Scott’s equity holding changes
Sep 25, 2026
Zip Co Limited has reported changes in director Cynthia Scott’s interests in the company’s securities, detailing movements across fully paid ordinary shares, performance rights and STVR restricted rights over several dates in September...
Zip Co Expands Share Capital Through Conversion of Unquoted Securities
Sep 25, 2026
Zip Co Ltd. has notified the market of the issue of new ordinary fully paid shares following the exercise or conversion of previously unquoted equity securities. The transactions, completed on 18, 21 and 23 September 2026, result in a total of 3,1...
Zip Co Issues New Unquoted Employee Equity Rights
Sep 25, 2026
Zip Co Ltd has notified the market of a new issue of 428,778 unquoted restricted rights under its employee incentive scheme, recorded as of 18 September 2026. The securities, designated as ZIPAN and not intended for ASX quotation, form part of the...
JPMorgan Exits Substantial Shareholding in Zip Co
Sep 24, 2026
JPMorgan Chase Co. and its affiliates have disclosed that they have ceased to be a substantial shareholder in Zip Co Ltd, following a series of transactions involving securities lending, investment management activities and proprietary trading. T...
Zip Co Appoints New Director Sarah Adam-Gedge With No Initial Shareholding
Sep 23, 2026
Zip Co Limited has announced the appointment of Sarah Adam-Gedge as a director, effective 17 September 2026, with an accompanying disclosure lodged to the ASX. The filing confirms that Adam-Gedge holds no relevant interests in Zip Co securities or...
Zip Co Ramps Up On-Market Buy-Back With 2 Million Shares Repurchased
Sep 17, 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 trading under the code ZIP. The latest filing confirms that the company is actively repurchasing i...
Zip Co Sets Virtual AGM and Key 2026 Reporting Dates
Sep 17, 2026
Zip Co Limited has announced key corporate dates for the remainder of 2026, including scheduling its Annual General Meeting for 19 November 2026 at 10:00am AEDT as a fully virtual event. The company will issue a formal notice of meeting closer to ...
Zip Co strengthens board with appointment of tech-focused non-executive director
Sep 16, 2026
Zip Co Limited has appointed experienced technology and governance executive Sarah Adam-Gedge as an independent non-executive director, effective immediately, with a seat on the Audit and Risk Committee. Adam-Gedge brings extensive board-level aud...
Zip Co Steps Up On-Market Share Buy-Back Activity
Sep 14, 2026
Zip Co Ltd has updated the market with a daily notification on its ongoing on-market share buy-back program for its ordinary fully paid shares. The latest filing shows that 1,000,000 ZIP shares were repurchased on the previous trading day, followi...
Zip Co launches share buyback after $23.7m EIP share purchase
Sep 14, 2026
Zip Co Ltd., a fintech player in digital payments and point-of-sale credit, operates in Australia and the United States, linking millions of customers to a large merchant network with flexible payment options. The company is exiting New Zealand as...
Australian Retirement Trust Cuts Stake Below Substantial Holder Level in Zip Co
Sep 9, 2026
Australian Retirement Trust Pty Ltd has notified Zip Co Ltd that it has ceased to be a substantial shareholder in the company as of 7 September 2026, ending a holding that previously crossed the substantial interest threshold under Australian corp...
Zip Co launches US$300m AAA-rated ABS to bolster U.S. growth
Aug 25, 2026
Zip Co Limited has strengthened its U.S. funding platform with the pricing of a new two-year US$300 million securitisation transaction, its first asset-backed security issuance in the market. The facility, carrying a weighted average margin of 143...
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...
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.