Zip Co Ltd (ASX: ZIP) stock closed yesterday trading for $2.30 a share, down 4.2%.
If you've been following along with the S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) stock, you'll know it's not immune to down days.
You'll also know that over the past 12 months, the up days – and the size of the gains on many of those days – have massively outweighed the down days.
How massively?
I'm glad you asked!
Let's turn the calendar back to late 2023.
If I was going to buy Zip stock last year, October would have been the ideal time.
For a number of days in early October 2023, including 5 October, Zip stock closed the day trading for 26 cents a share.
Yep, that's no typo.
This means that as of yesterday's close, the single Zip share I bought in 2023 will have gained an eye-watering 796%.
Now, turning 26 cents into $2.30 isn't going to turn many heads.
But what if I'd chosen to invest $2,600 instead?
On 5 October 2023, that $2,600 would have bought me 10,000 Zip shares. And at yesterday's close, those would have been worth $23,000.
Not bad!
What's been driving Zip stock higher?
After losing ground (a lot of ground) from early 2021 through to late 2023, investor sentiment toward Zip stock took a big turn for the better in October.
This came amid a shift in both managerial and operational tactics. One that no longer targeted growth at all costs, instead favouring a new, more sustainable, and profitable business model.
And in a story of success breeding more success, Zip's strong first-half performance in 2024 saw the BNPL company rejoin the ASX 200 on 22 July. That opened the door for more fund managers, often restricted to investing in the large end of the market, to buy the stock.
This also means that ASX 200 index-tracking funds will need to own Zip stock to mirror the performance of the benchmark index.
As for Zip's financial performance, the company reported its full-year results for the 12 months ending 30 June (FY 2024) last Tuesday, 27 August.
Highlights included a 28.2% year-on-year increase in revenue to $868 million and Zip's total transaction volume (TTV) of $10.1 billion, up 14.0% from FY 2023.
This helped the company boost its cash gross profit by 52.8% year on year to $373 million.
The Zip share price tumbled 7.9% last Tuesday, the day the company reported. But investors had second thoughts about that on Wednesday, sending Zip stock soaring to close the day up 13.9%.
