The Zip Co Ltd (ASX: Z1P) share price is heading in the right direction at long last on Wednesday.
At the time of writing, the buy now pay later (BNPL) provider's shares are up over 5% to $1.49.
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Why is the Zip share price rising?
Today's gain by the Zip share price appears to have been driven by a combination of bargain hunting and a rebound in the tech sector.
In respect to the latter, the S&P/ASX All Technology index is up 2.8% at the time of writing. This follows a very strong night of trade on the tech focused Nasdaq index.
As for bargain hunters, with the Zip share price still down 65% in 2022 even after this gain, some (brave) investors appear to believe it could have found a bottom.
Which is reasonably understandable. After all, while UBS still believes Zip's shares can fall down to $1.00, a number of other brokers have price targets well-ahead of where the company's shares trade today.
For example, the team at Citi currently has a neutral rating on its shares, but a price target of $2.15. Based on the current Zip share price, this implies potential upside of 44%. That's not bad considering the broker is sitting on the fence with its recommendation.
Citi recently commented: "While we get the strategic merit in the Sezzle acquisition and see the cost synergies (opex and COGS) as achievable, we do not think the acquisition changes Zip's competitive position in a meaningful way in the US and also see execution risks (e.g. churn) as part of the integration process. The more immediate concern is higher than expected bad debt and slowing growth due to adjustments to risk settings and slowing e-commerce. However, with the balance sheet repaired we remain Neutral."
