Investors have been giving the BNPL company a great deal of attention this year.
The post What is the outlook for the Zip (ASX:Z1P) share price? appeared first on The Motley Fool Australia. –
The Zip Co Ltd (ASX: Z1P) share price has received a great deal of attention from investors this year.
There have been several catalysts that have driven interest in the buy-now-pay-later (BNPL) player.
With so many moving parts, investors will be keen to gauge an outlook on the future of the Zip share price.
Top broker gives verdict on Zip share price
Recently, noted broker Citi, provided an outlook on the future of the Zip share price.
Analysts from the broker believe that shares in the BNPL can keep rising.
As a result, the broker retained a buy rating on Zip and initiated an $8.90 target on the company’s shares.
According to analysts, Square Inc’s (NYSE: SQ) takeover of Afterpay increases the takeover appeal for Zip.
In particular, analysts highlighted Zip’s fast growing US business QuadPay.
This theory has been backed up recently, with speculation that Swedish-backed BNPL provided Klarna has Increased its stake in Zip.
Klarna, which is also part-owned by the Commonwealth Bank of Australia (ASX: CBA), reportedly took a 4% stake in Zip to consolidate its market share.
Outlook for the Zip share price
The Zip share price has had a rollercoaster year thus far.
Shares in the BNPL provider started the year at around $5.40.
By mid-February, the Zip share price had surged to an all-time high of $14.53.
Since then, the company’s shares have been harshly sold off by investors.
Following Afterpay’s takeover approach, the Zip share price has received a significant boost recently.
However, the outlook for shares in the company remains uncertain.
Securities in Zip remain one of the most shorted on the exchange. The most recent data indicates a 9.4% short interest in the company.
The outlook for Zip shares is also heavily dependant on how the company has performed for the financial year.
In its most recent quarterly update, Zip flagged a 116% year on year increase in quarterly total transaction volume (TTV) to $1.8 billion.
In addition, the company reported a 104% increase in quarterly revenue to $129.9 million.
Currently, there is no published date on when Zip will report its results for the full year.
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Motley Fool contributor Nikhil Gangaram 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 AFTERPAY T FPO, Square, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.