The Zip Co Ltd (ASX:Z1P) share price has been very volatile in 2020. Where are Zip shares going from here? Higher or lower?
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It certainly has been an eventful year for the Zip Co Ltd (ASX: Z1P) share price.
The buy now pay later provider’s shares have been as low as $1.05 in March and as high as $10.64 in August.
Today they are trading in the middle of this range at $6.06.
Where next for the Zip share price?
Given its rollercoaster ride in 2020, investors will no doubt be trying to figure out where the Zip share price will be going next.
While I suspect that its shares could go notably higher from here if it continues its impressive growth in the coming quarters, I thought I would take a look to see what brokers are predicting.
There are a couple of brokers that are bullish on Zip and have positive ratings on its shares.
Ord Minnett has an accumulate rating and a $6.45 price target, whereas Morgans has an add rating and lofty $10.28 price target.
The latter price target implies potential upside of almost 70% over the next 12 months.
Its analysts are positive on its outlook thanks to its international expansion, the Zip Business launch, and its partnership with eBay Australia.
The likes of Macquarie, Citi, and UBS all have the equivalents of sell ratings on the company’s shares at present.
Macquarie is the most bearish in the group with its underperform rating and $4.80 price target. This price target implies potential downside of almost 21% for the company’s shares.
Whereas UBS has a sell rating and $5.50 price target and Citi has a sell rating and $6.70 price target. The latter is now higher than where Zip’s shares are trading currently.
Should you invest?
While my preference remains Afterpay Ltd (ASX: APT) at current prices, I still think Zip would be a great long term option for investors.
As you can see from the varying opinions above, knowing where the Zip share price will go in the near term is highly unpredictable. However, over the long term, I’m confident it will be going notably higher from here.
This is thanks to its international expansion, new verticals, and the growing popularity of the payment method.
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James Mickleboro 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 owns shares of AFTERPAY T FPO. 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.