Zip had a so-so first quarter to the new financial year.
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The Zip Co Ltd (ASX: Z1P) share price had a bumpy first quarter for FY22.
Kicking off the new year at $7.57, shares in the Buy Now, Pay Later (BNPL) company accelerated to nearly $9 by mid-July. By the end of the quarter, Zip shares fell by 6.87% to $7.06 apiece. For context, the S&P/ASX 200 Index (ASX: XJO) actually ended the quarter 0.26% higher.
There’s been a few stories that have had a material impact on Australia’s second-largest BNPL provider during that time.
Let’s take a closer look.
Zip’s FY21 full year results
The Zip share price crashed in late August when the company released its full-year results for FY21. That’s despite the company posting the following, positive numbers:
Revenue of $403.2 million, up 150% year on year (FY20 $161 million)
Transaction volumes of $5,8 billion, up 178.5% (FY20 $2.1 billion)
Transaction numbers of 41.3 million, up 293% (FY20 10.5 million)
Active customers at 7.3 million, up 247.5% (FY20 2.1 million)
Active merchants at 51,300, up 109.4% (FY20 24,500)
Cash gross profit of $198 million, up 147% (FY20 $80.1 million)
Looking forward, Zip management said it did expect FY22 to be a “bumper year” for the company. The company noted that global market entries and investments are contributing meaningful total transaction volumes (TTV) in the new financial year.
What else has affected the Zip share price?
On the former, Zip said in a media release it had agreed to make a “strategic” US $50 million investment in India-based BNPL operator ZestMoney.
ZestMoney currently has 11 million registered users, over 10,000 online merchants on the platform, and a point of presence in over 75,000 physical stores.
Management advised that this investment is consistent with its strategy to build a truly global BNPL business. And one that supports regional and global partners in multiple markets, providing everyone, everywhere with access to fair and transparent payment products. The Zip share price rose on the news.
On the latter, Zip says it will integrate its technology into the shopping experiences within Microsoft Edge. In turn, shoppers using the web browser will be able to use a digital payment option provided by Zip.
The integration into the company’s web browser will begin rolling out in the United States first. Microsoft is the second-largest company on the planet by market capitalisation. This news was a big deal for Zip. It is not uncommon for momentum from material developments to carry on for days afterwards.
Zip share price snapshot
Over the past 12 months, the Zip share price has decreased by about 6%. Year-to-date, however, shares in the company are up by roughly 22%. Its 52-week high is $14.53 per share and its 52-week low is $4.96 per share.
Zip has a market cap of approximately $3.9 billion.
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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Microsoft and ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.