Could the Zip share price be ready to have a crack at $10 again? 

Could the Zip Co Ltd (ASX: Z1P0 share price have another crack at its previous record all-time high following its recent resurgence?
The post Could the Zip share price be ready to have a crack at $10 again?  appeared first on Motley Fool Australia. –

The Zip Co Ltd (ASX: Z1P) share price came crashing down as fast as it went up. In a matter of just 15 trading sessions it climbed from $6.70 to $10.50 and back to $6.70 again. With the PayPal fears behind us, could the Zip share price be ready to have a crack at $10 again? 

Paypal fears forgotten 

The reason for the initial broad BNPL sell off was due to PayPal launching a very similar product. This product will allow customers to pay for a purchase in four instalments over a six-week period, without being charged interest. The key advantage for PayPal is its existing network of more than 26 million merchants and 324 million users. The company has the capability to quickly and easily introduce its product offering to a much bigger audience at a potentially cheaper fee to merchants. Its impact on Zip is yet to be known, but nonetheless a potential risk for Zip’s growth in the US. The PayPal fears combined with a broader sell off of tech shares saw the Zip share price sink almost 50% from recent peak to trough. 

Is the Zip share price a buy? 

The market is expected to continue in a volatile fashion leading into the US election and COVID-19 related fears. I believe investors could take advantage of the potential volatility to come as an opportunity to buy Zip shares at a cheaper price. 

Notwithstanding the risks to the broader market, the Zip share price does appear to have found a bottom and starting to grind higher. I believe further catalysts and news will be needed for the Zip share price to have another crack at the $10 mark. So what could investors look forward to? 

Firstly, the federal budget will be announced today with anticipated immense spending across all sectors of the economy to boost activity and underpin employment. The government hopes that bringing forward income tax cuts will lead to additional spending to kickstart the economy. This is likely to be good news for retail-related sectors including Zip. 

Additional business updates particularly regarding its Quadpay performance will be key in reaffirming investors that PayPal is not a significant threat. Zip had previously updated the market on 24 August of Quadpay’s record performance and growth. This update highlighted record monthly translation volume in excess of US$70 million in July, representing a 30% increase on the June quarter average and a 600% increase year on year. It added an additional 133,000 customers in July and surpassed the 2 million customer milestone in August. It does appear that the momentum is building the Quadpay. 

Foolish Takeaway

A positive US market update and continued international expansion will be key for the Zip share price to have a crack at its recent record all-time high. I would prefer to be buying at a cheaper price for better risk/reward, and the current market volatility could offer that window of opportunity for those that believe in the Zip growth story. 

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Could the Zip share price be ready to have a crack at $10 again?  appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!