Why the Zip share price keeps going up

It's been triple-digit gains this year for Zip.

| More on:
A cool dude looks back at the camera while ziplining above the treetops.

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 has surged more than 300% this year to date after staging a 16% rally this past month.

Shares in the buy now, pay later (BNPL) player are currently fetching $2.56 per share, down more than 7% in the past week.

But what's driving the buying of Zip shares this year? Let's take a closer look.

Created with Highcharts 11.4.3Zip Co PriceZoom1M3M6MYTD1Y5Y10YALL8 Oct 20234 Oct 2024Zoom ▾Nov '23Jan '24Mar '24May '24Jul '24Sep '24Jan '24Jan '24Apr '24Apr '24Jul '24Jul '24www.fool.com.au

What's driving the Zip share price?

The Zip share price has enjoyed a mammoth wave of buying momentum over the past year. This is largely due to its financial performance and various company updates.

Investors were first buoyed by the company's H1 FY24 financials, which showed a serious turnaround in the business from prior years.

Before this, it had made the call to avoid growing the business without producing shareholder value alongside it.

The financial momentum continued in the back end of FY24. For the full year, revenues grew 28%, producing total transaction volumes (TTV) of $10.1 billion, up 14%.

Consequently, gross profit saw a 53% increase from FY23.

These factors have seen investors jump in on the BNPL player, seeing the Zip share price spike.

Opportunities for growth exist

Fundies are all over Zip, with several institutional investors recently taking their book and backing the Zip share price.

Regal Partners believes Zip could grow into a large-cap stockwhich looks set to happen after recent developments.

The fund manager noted Zip's "long runway of growth" in the US and its expanding network of merchants as growth factors, according to The Australian Financial Review.

Regal also pointed out that Zip added 2,000 new merchants in the US during FY24. It bought Zip at 30 cents per share and still reportedly owns a large position. You do the math on that one.

Meanwhile, the team at Blackwattle Small Cap Quality Fund are also bullish on the Zip share price.

In its August fund letter, the firm pointed out Zip due to its US growth, new partnerships such as Google Pay and Stripe, and a healthy balance sheet.

According to my colleague Bernd, Blackwattle added that Zip still presents a "significant opportunity for growth" in the US market. This could be a positive for the Zip share price.

Foolish takeaway

The Zip share price has been on a tear, and with strong US growth, expanding partnerships, and the possibility of a takeover, many analysts believe the stock could continue to rise.

The stock is up nearly 900% in the past 12 months. Yes, you read that correctly.

Should you invest $1,000 in Zip Co right now?

Before you buy Zip Co shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Zip Co wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Zach Bristow 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 BNPL shares

A young woman smiles as she rides a zip line high above the trees.
BNPL shares

How Zip shares rebounded 45% from their 7 April lows to beat the ASX 200

Did you catch what happened with Zip shares in April?

Read more »

A young woman in a shop hands her credit card to the cashier.
BNPL shares

Up 41% in 3 weeks, should I buy Zip shares today?

Zip shares have been on a tear in April. Now what?

Read more »

A young woman smiles as she rides a zip line high above the trees.
BNPL shares

Zip share price rockets 15% on record cash earnings!

It’s a great day to own Zip shares today. Here’s why.

Read more »

A young woman in a shop hands her credit card to the cashier.
Share Gainers

Zip share price rockets 20% on $50 million buyback news

Zip shares are surging ahead of the company’s planned $50 million buyback.

Read more »

BNPL written on a smartphone.
BNPL shares

Down almost 40% this year, can Zip shares turn around?

Is it time to buy now or wait until later?

Read more »

A man looking at his laptop and thinking.
BNPL shares

Buy, hold, or sell: What's the verdict on Zip shares?

Time to buy the dip on Zip, or time to close the case for good?

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Earnings Results

Zip share price jumps 11% on record half year result

This buy now pay later provider has delivered another impressive result.

Read more »

A young woman in a shop hands her credit card to the cashier.
BNPL shares

Own Zip shares? Here's what to watch when the company reports next week

After big returns in 2024, here’s what to expect from the buy now, pay later company in next week’s report. 

Read more »