The Zip Co Ltd (ASX: Z1P) rocketed 18.6% higher last week after the Aussie "buy now, pay later" (BNPL) company reported a bumper full-year result.
But, while Zip now boasts a market cap of $1.2 billion and has announced plans to expand further, could it be a better ASX buy than rival BNPL provider Afterpay Touch Group Ltd (ASX: APT)?
With Afterpay set to announce its results next week, let's take a look at a head-to-head of the two ASX growth stocks and see which could be a better buy in 2019.
Zip Co's strong earnings result
Zip saw full-year revenue rocket 138% higher to $84.2 million as transaction volume also surged 108% higher to $1,128.5 million for the year.
Compared to its FY18 figures, Zip's customer numbers soared 80% to 1.3 million as transactions processed shot 154% higher to 4.8 million for FY19.
Positively for Zip's growth outlook, net bad debt write-offs remained low at 1.63% despite the strong growth in volumes and earnings, which may provide signs of strong scalability potential.
The company recently announced the acquisition of PartPay which will increase Zip's presence in key markets such as the United Kingdom, USA, South Africa and New Zealand.
This would appear to be a sign that Zip is confident it can take on rival Afterpay with a little international expansion of its own.
The Afterpay share price has surged for a reason
While the Zip share price is up 207% so far this year, the Afterpay share price has seen some tidy growth of its own in the last 8 months or so.
Despite several headline-grabbing events so far this year, including the recent Senate inquiry and the ongoing AUSTRAC audit, the Afterpay share price has still managed to double so far in 2019.
While we wait for Afterpay's full-year results on Wednesday 28 August, I think a strong earnings result could ease investors' concerns about its future growth prospects and see the Afterpay share price climb higher.
Foolish takeaway
There is no doubt that investors in either of these ASX growth stocks would have enjoyed strong gains since the start of the year, let alone over the last 2 years.
Personally, I think Zip has done well to show it is a serious contender and can keep up its growth relative to Afterpay, particularly given the regulatory issues that seem to have plagued its rival in 2019.
However, Afterpay remains a favourite amongst ASX investors and I wouldn't be writing off Afterpay shares as a serious winner from the August reporting season ahead of its Wednesday full-year result.
