If you'd invested $5,000 in Zip shares this time last year, here's what you'd have today

Let's see how successful an invest in the BNPL provider would have been.

| More on:
Business people discussing project on digital tablet.

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

Zip Co Ltd (ASX: ZIP) shares have been a revelation over the past 12 months.

During this time, the buy now pay later (BNPL) provider's shares have absolutely smashed the market.

Why are Zip's shares beating the market?

Investors have been buying the company's shares after it defied the naysayers by proving that its business model can be successful even as interest rates rise.

Not only that, but the company also transitioned from making huge losses to being profitable.

As a reminder, in August, Zip released its full year results and revealed a 28.2% increase in revenue to $868 million and a sizeable 243.2% jump in cash EBTDA to $69 million.

The star of the show for the company was the Zip Americas business. It delivered record Cash EBTDA of $77.2 million (up 420%), record total transaction value (TTV) of $6.5 billion (up 39.5%) and record revenue of $450.6 million (up 45.6%). This was driven by optimisation across product and underwriting and continued growth from existing customers in higher-margin channels.

This was supported by the Zip Australia and New Zealand business. It achieved a record cash EBTDA result of $33 million (up 137.4%), revenue of $417.4 million (up 13.5%). This was despite Zip battling a significant increase in interest costs and a more challenged macro environment.

Commenting on the year, Zip Group's CEO and managing director, Cynthia Scott, said:

This has been an outstanding year for Zip, with the Company executing against all of its strategic priorities and reinforcing its position as a strong, simplified and profitable business. The team successfully delivered four quarters of profitability, achieving Cash EBTDA of $69.0 million for the year, an improvement of $117.0 million on FY23. This result was driven by Zip's particularly strong performance in the US with record cash EBTDA, TTV and revenue, and the ANZ business delivering a record cash EBTDA result of $33.0 million underpinned by continued margin expansion.

$5,000 invested in Zip

If you were brave enough to invest $5,000 into Zip's shares a year ago, you would have been able to do so at 38 cents per share.

This means that you would have picked up a total of 13,158 shares.

Today, those shares are worth considerably more. At the time of writing, the Zip share price is fetching $3.39. This is approximately nine times what they were going for just 12 months ago.

As a result, those 13,158 shares now have a staggering market value of $44,605.62.

That's not a typo! A $5,000 investment a year ago really is worth almost $45,000 today. Here's hoping there are more strong gains to come in 2025.

Motley Fool contributor James Mickleboro 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 looks happily at her phone in one hand with a selection of shopping bags in her other hand.
BNPL shares

Up 87% since April, why the Zip share price can keep flying higher into 2026

A leading fund manager expects more outsized gains from Zip shares ahead.

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Share Gainers

Guess how much $10,000 invested in Zip shares on 7 April is worth today!

The rebound in the Zip share price since 7 April has been nothing short of remarkable.

Read more »

Frustrated and shocked business woman reading bad news online from phone.
BNPL shares

Why is the Zip share price dropping today?

Let's see how this buy now pay later provider performed in April.

Read more »

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 »