Why Is Zip Co Stock Expecting To Upgrade Its Position on ASX?
Zip provides point-of-sale credit, digital retail finance, and payments solutions to consumers, and small and SMEs in Australia, the UK, the US, NZ, Mexico, and Canada. The company operates through three segments: ZIP AU, Zip Global, and Zip Business.
The Zip share price is in focus.What is the outlook for the buy now, pay later company? Well, it has been a tricky year for the BNPL business. Whilst the Zip share price only shows a 12% drop this calendar year, there has been a much bigger decline over shorter periods. Moreover, during the last six months, Zip has dropped 32%. It is now down 64% since mid-February.
Unless ASX-listed BNPL shares experience a dramatic Christmas rally, the sector looks likely to underperform the ASX 200 in 2021. This sort of performance almost seems uncharacteristic for Zip Co. Although, since 2018, Aussie BNPL high-flyers have cemented substantially higher returns than the benchmark before this year.
However, this year gave rise to headwinds for ASX BNPL shares. This led to a dramatic shift in sentiment. For investors, a question arises, will the waning optimism continue into 2022?
Zip poised for a strong rebound in 2022
Zip is confident about growth in the short-to-medium term. Just this month, the company stated that it remains steadfast in its mission to disrupt the “unfair and broken” credit card business. This by offering a better and fairer digital alternative, to become the first payment.
Zip enters 2022 with strong momentum, in a solid financial position, with a continued focus on execution, and global synergies. Hence, the company is now processing annualised volume of more than $10 billion. After a few expansions and acquisitions, Zip now has one of the largest BNPL footprints geographically.
Zip continues to grow quickly. Whilst the Zip share price is falling, operationally, the company continues to deliver a high level of growth.
In November 2021, Zip achieved a record monthly transaction volume of $906.5 million which was a 52% increase year-on-year. Customer numbers increased by 71% year-on-year to 9.2 million. Zip business transaction volume grew 44% month-on-month to $15.2 million. Furthermore, Zip geographic expansion markets delivered $50 million more of volume than projected.
The BNPL company is now in numerous markets including the USA, ANZ, the UK, Canada, and Mexico to name a few.
