The Zip Co Ltd (ASX: ZIP) share price has set a series of fresh multi-year highs in 2024.
Despite closing down 0.96% at $3.11 yesterday on the heels of the US presidential election results, shares in the S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) stock are up a blistering 660% over the past 12 months.
Indeed, you'd have to go back to January 2022 to find the Zip share price trading any higher.
So, just what's been sending stock in the BNPL company to regularly break multi-year records?
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What's propelling the Zip share price to almost 3-year highs?
The ASX 200 payments stock still has a long way to go before resetting its closing day high of $12.35 a share, set on 19 February 2021. But the stock does hold the record for the best-performing ASX 200 company over the past year.
On a broad macroeconomic level, the Zip share price has been catching some tailwinds from lower interest rates in the United States, where the company has a large footprint. As well as the prospect for lower rates on the horizon in Australia.
BNPL stocks like Zip have proven to be highly sensitive to interest rates, which could explain yesterday's retrace as president elect Donald Trump's economic policies may rekindle US inflation and slow the pace of Federal Reserve easing.
On a company-specific level, investors have been sending the Zip share price to new multi-year records, fueled by some very strong growth metrics.
At its FY 2024 results (covering the 12 months to 31 June), Zip reported a 28.2% year-on-year increase in revenue to $868 million. This was spurred by a 14.0% boost in total transaction value (TTV) of $10.1 billion. And it saw the company achieve a cash gross profit of $373 million, up 52.8% from FY 2023.
CEO Cynthia Scott noted that Zip was "executing against all of its strategic priorities and reinforcing its position as a strong, simplified and profitable business".
Although the stock slid 7.9% on 27 August, the day management released the full-year results, shares rebounded 13.9% the following day.
Record-breaking year continues
The Zip share price continued on its record-breaking year after the company released its first quarter results for FY 2025 on 29 October. Again, this saw the ASX 200 BNPL stock close down 4.2% on the day before rebounding 5.3% the following day.
Highlighting the strong quarterly performance, Scott said, "Zip has continued to drive scale and operating leverage in this financial year, with the team delivering a group cash EBTDA result of $31.7 million, up 233.7% versus the first quarter of FY24."
TTV in Zip's US business was up 42.8% year on year in Q1 FY 2025, while revenue was up 43.9%.
