Sell now, sell later for the Zip share price In broad market moves, the S&P/ASX 200 Index (ASX: XJO) is rangebound today and is flat on the day at 6,597. However, noteworthy is a bearish research note out of UBS today, highlighting growing concerns for the company. Investors have pushed Zip lower today on no news. Please read our Terms and Conditions and Financial Services Guide before using this website.The Zip Co Ltd (ASX: ZIP) share price is cratering in morning trade on Thursday and now sits 7% lower at 53.5 cents.
In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. It is not specific to you, your needs, goals or objectives. That means, the information and advice does not take into account your objectives, financial situation or needs. Information warning: The information in this article was published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. If management delivers on the breakeven target by FY24, I’m bullish the Zip share price could move higher from here. Can Zip attract bigger merchants? Can it retain margins? And how will competition respond? I do believe management’s view that a bigger company will have better unit economics and future growth.īut it all comes down to execution. Like Zip, the Sezzle share price is also down 82% over the past year. How will Sezzle impact the Zip share price? The move to profitability likely comes at the expensive growth in more nascent markets.īut it will mean the business no longer needs to rely on the market and will alleviate concerns over cash burn. The business now expects to be EBITDA and cash flow positive by FY24, which would be a massive achievement from the $214 million loss it achieved last half.
Part of the Zip share price fall has been the never-ending losses its been accumulating – $961 million as of December 31. “We still believe in the global opportunity… what we’re calling out is the investment strategy will be a little bit more focused on the core markets that are closer to profitability…slowing investment in markets that are further away from that profitability…” Zip also expects to realise $130 million in revenue and cost synergies with a bigger US presence. It will account for 60% of transaction value, up from 48%. “We’re on a mission to be the first payment choice, everywhere and every day” – Zip websiteīut by buying Sezzle, the business looks to be doubling down on the US market. The business has purchased small stakes in BNPL operators in India, Europe, South Africa and the Middle East to create a global footprint. Zip shareholders will be familiar with the “global expansion strategy”. So we’ve actually built quite differentiated customer geodemographic profiles across the US” – Larry Diamond “…depending on how you look at it, about 25% of the app is overlap. It’s also worth pointing out that there will be some overlap between Zip and Sezzle customers.įor example, a customer may use the Zip app for some purchases and Sezzle online checkout for others. It’s a similar story on the merchants side. Unfortunately, Zip remains well behind the likes of Paypal (426 million active customers) and Klarna (147 million active customers). “One of the reasons that we both lost out on merchant deals is because we haven’t had enough customers” – Larry Diamond, Zip CEO Zip is now able to go to bigger merchants and compete more effectively for new merchants.
That puts it in line with other competitors like Afterpay (16.2 million customers at June 30) and Affirm (11.2 million customers). One of the major benefits of the Sezzle merger is the enlarged payment ecosystem of 13.3 million customers and 128,800 merchants. Source: Rask Media Z1P 5-year share price