The Zip share price just rocketed 13%. Here's why

ASX 200 investors are sending Zip shares rocketing on Wednesday. But why?

| More on:
Businessman smiles with arms outstretched after receiving good news.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Zip Co Ltd (ASX: ZIP) share price is surging higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) stock closed yesterday at $2.09. In afternoon trade on Wednesday, shares are swapping hands for $2.37 apiece, up 12.7%.

That's a strong performance on any given day. But it's particularly impressive knowing that the ASX 200 is down 0.5% at this same time.

So, what's going on?

Zip share price rebounds from selloff

ASX 200 investors look to be doing some bargain hunting after the Zip share price closed down a precipitous 7.9% yesterday.

The ASX 200 BNPL stock closed on Monday at $2.27 a share and popped higher on Tuesday's open to $2.32 a share. But it was all downhill from there until the closing bell saw shares trading for $2.09 each.

Yesterday's big selloff followed Zip's release of its full-year financial results for the 12 months ending 30 June (FY 2024).

I covered that release on the day.

To be honest, I was surprised by the negative market reaction.

And judging by the big leap higher in the Zip share price today, it looks like I wasn't alone.

Indeed, Zip reported strong growth across almost all of the company's core financial metrics.

For example, revenue of $868 million was up 28.2% from FY 2023. And Zip's FY 2024 cash gross profit of $373 million was up 52.8% year on year.

The strong results were driven by a 14.0% increase in total transaction volume (TTV) over the year, which reached $10.1 billion.

Indeed, after struggling in FY 2022 and FY 2023, Zip delivered four consecutive quarters of profitability.

And management remains optimistic about the outlook for FY 2025.

"We maintain a clear strategy with identified growth opportunities in both markets to drive continued profitable growth in FY 2025 and beyond and deliver long-term value for our customers, merchants and stakeholders," CEO Cynthia Scott said.

How has the ASX 200 BNPL stock been tracking?

The Zip share price has been among the top performers on the ASX 200 over the past year.

And with today's big surge, the ASX 200 BNPL share is helping cement its leadership spot.

At $2.33 a share, Zip stock is up an eye-popping 615% over 12 months.

Or enough to turn a $6,000 investment into $42,900 in one year!

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Zip Co. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

Happy woman working on a laptop.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a pleasant end to the trading week for investors this Friday.

Read more »

A happy investor sits at his desk in front of his laptop and does the mexican wave with his arms to celebrate the returns from his ASX dividend shares
Share Gainers

Why Chrysos, GQG Partners, Macquarie, and Webjet shares are storming higher today

These shares are ending the week on a positive note. But why?

Read more »

A young man sits at his desk working on his laptop with a big smile on his face.
Share Gainers

The top 3 ASX 200 trades since the Liberation Day dip

These companies are up at least 35% in just over a month.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Share Gainers

Boss Energy shares have rocketed 90% in a month. Here's why

The massive rally in Boss Energy shares will be painful to the host of short sellers betting against the uranium…

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors sent the market higher once again today.

Read more »

Rising gold share price represented by a green arrow on piles of gold block.
Gold

3 reasons to buy this surging ASX All Ords gold stock today

The ASX All Ords gold stock has doubled investors’ money in 12 months, and this leading expert forecasts more outperformance…

Read more »

Two colleagues at work looking at a tablet and smiling at a rising share price.
Share Gainers

Why Generation Development, Orica, Pro Medicus, and Zip shares are storming higher today

These shares are having a strong session on Thursday. But why?

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

Up 114% in a year, why is the Pro Medicus share price leaping higher again on Thursday?

Pro Medicus shares are back in form today and leaping ahead. Here’s why.

Read more »