Depressed Zip (Z1P) shares have staged a much needed bounce on Tuesday following the release of a November trading update. The company’s stock rallied 9.5% as the market opened.
For the month of November, Zip reported record transaction volumes of $906.5m, up 52% on the previous period.
What’s interesting is that Zip’s expansion markets, including Canada, Mexico, Twisto (Poland and Czech Republic), Spotti (United Arab Emirates and Saudi Arabia) and Payflex (South Africa) made a $51.6m or 5.7% contribution to total transaction volumes.
Transaction numbers also marked record highs, up 86% to 7.5m, while customer numbers increased 71% to 9.2m.
Based on November, transaction volumes are now annualising at over $10bn, significantly higher than the $5.8bn figure in its FY21 results.
Investors might want to note that Zip made the call to omit its revenue performance, a figure that was reported in most of its previous trading updates.
In July, Zip unified its global brands, including US-based Quadpay, under one name. Zip was pleased to advise its brand awareness in the all-important US market is now “at higher levels than pre Zip rebrand”.
On the M&A front, Zip successfully completed its Twisto acquisition in November, providing a regional HQ and a ‘passport’ for European expansion.
Managing director and global CEO Larry Diamond said November was a very strong month for the company with many new markets processing BNPL payments for the first time.
Zip shares have gone full circle, trading at roughly pre-covid levels. Fierce competition in the BNPL sector, a recent risk-off attitude towards tech stocks and the prospect of rising interest rates has weighed.
Interestingly, there’s a consensus Buy recommendation on Zip with a potential upside of 55% its current share price.
Finance Writer & Social Media
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