Insights

Why Zip (ASX:Z1P) and this beaten down ASX tech share could be buys

Zip Co Ltd (ASX:Z1P) and this beaten down ASX tech share could be in the buy zone now. Here’s what you need to know about them…
The post Why Zip (ASX:Z1P) and this beaten down ASX tech share could be buys appeared first on The Motley Fool Australia. –

women with a microphone is happy whilst using a computer

The tech sector has been uncharacteristically out of form this year. While this is disappointing, every cloud has a silver lining. The silver lining here is that this weakness has dragged some tech shares down to very attractive levels for investors.  

Two ASX tech shares that are down heavily from their highs are listed below. Here’s why this could be a buying opportunity:

Altium Limited (ASX: ALU)

The Altium share price is down 39% from its 52-week high. This could make it one to consider for long term focused investors.

Altium is the electronic design software provider behind the Altium Designer and Altium 365 platforms. These platforms allow users to design the complex printed circuit boards found inside electronic devices.

Thanks to industry tailwinds that are underpinning growth in electronic devices globally, Altium appears well-positioned to benefit from increasing demand for subscriptions in the coming years.

And although the COVID-19 pandemic has softened demand, analysts at Citi believe investors should stick with the company. This is due to its belief that the downgrade cycle is now over and its growth will soon resume.

Citi recently retained its buy rating and $33.50 price target on the company’s shares. This compares to the latest Altium share price of $24.52.

Zip Co Ltd (ASX: Z1P)

Another tech share to look at is this buy now pay later provider. The Zip share price may be up 25.5% year to date, but it is down 51% from its 52-week high. While the latter is disappointing, it could be a buying opportunity for buy and hold investors due to its strong growth potential.

Zip has been growing at a rapid rate in recent years thanks to the growing popularity of the buy now pay later method and its international expansion. Positively, this strong form has continued in FY 2021. For example, during the third quarter, Zip reported an impressive 80% increase in group quarterly revenue to $114.4 million.

This was driven by a combination of customer growth and repeat usage. In respect to the former, at the end of the period, Zip had 6.4 million active customers globally. This was up 88% from the prior corresponding period and 12.3% from 5.7 million at the end of December.

Its growth was strongest in the United States, with its QuadPay’ business reporting transaction volume growth of 234% to $762 million, revenue growth of 188% to $54.4 million, and customer growth of 674,000 or 153% to 3.8 million. The good news is that this is still only a tiny fraction of a $5 trillion market opportunity in the United States. This gives it plenty of room for growth in the future.

Citi is also a fan of Zip. Last month its analysts upgraded the company’s shares to a buy rating with an $11.30 price target. This compares to the latest Zip share price of $7.02.

Where to invest $1,000 right 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.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

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’s parent company Motley Fool Holdings Inc. recommends Altium. The Motley Fool Australia owns shares of Altium. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why Zip (ASX:Z1P) and this beaten down ASX tech share could be buys appeared first on The 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!