Why is the Zip share price rocketing 7% today?

Exciting news from the US could be the catalyst for investor buying now.

| More on:
A happy girl in a yellow playsuit with a zip gives the thumbs up

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 jumped 7.3% to $3.02 today, likely due to some positive news out of the United States. One expert is particularly excited by what this means for the buy now, pay later (BNPL) business.

Zip has two main markets – the US and Australia/New Zealand. While Zip may have built its business and reputation in Australia, the company's biggest growth avenue is the US, which has well over ten times the population of Australia.

Positive developments in the US could be good news for the company in the foreseeable future.

Let's look at what happened across the Pacific.

Citi is excited about Zip shares

According to reporting by The Australian, Citi share analyst Siraj Ahmed has placed a positive catalyst watch on the BNPL provider because of an earnings update by Sezzle, a rival in the US that used to be listed on the ASX.

Sezzle reportedly increased its revenue guidance to more than 55% year-over-year growth due to "exceptional holiday demand."

Another positive, according to the Citi analyst, was that Sezzle reported that credit losses were in line with expectations. This was consistent with Zip's feedback from management to Citi in December.

The recent US Federal Reserve interest rate cuts in the US last year have boosted consumers, but Zip's quarterly performance may also benefit from a weaker Australian dollar compared to the US dollar, according to CIti. Zip reports in Australian dollars, so a weaker Australian dollar increases the value of US dollar-denominated sales for shareholders.

Citi's Ahmed suggested there was a positive chance that the market could increase expectations of how much cash operating profit (EBTDA) the business could generate in FY25, compared to the current forecast of $153 million. Citi thinks the cash EBTDA could be $158 million, assuming an exchange rate of AU$1 to US 66 cents.

Zip share price target

Can Zip shares keep rising? A price target is where a broker thinks the share price will be in 12 months from the time of the investment call.

Citi currently has a price target of $3.15 on the buy now, pay later business. That implies a possible rise of approximately 5% from today's level.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor Tristan Harrison 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

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX shares finished the trading week on a high this Friday.

Read more »

A businessman stacks building blocks.
Technology Shares

6% gain! What's up with Block shares today?

Block shares are up more than 34% since 2 May.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Share Gainers

Why ARB, Block, Mayne Pharma, and Paladin Energy shares are charging higher today

These shares are having a strong finish to the week. But why?

Read more »

A woman puts her hands up as she smashes and breaks through a glass ceiling.
Share Gainers

How these 5 ASX 200 stocks are smashing the benchmark this week

These fives ASX 200 stocks have made some very happy shareholders this week. Here’s how.

Read more »

A man looking at his laptop and thinking.
Share Gainers

Here are the top 10 ASX 200 shares today

The markets lost their steam this Thursday.

Read more »

Ecstatic woman looking at her phone outside with her fist pumped.
Share Gainers

Why Catapult, Hutchinson, SKS, and West African shares are pushing higher today

These shares are having a strong session despite the market weakness.

Read more »

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

Up 72% in 2025, why is this ASX 200 gold stock racing ahead of the benchmark again today?

Investors are bidding up this high-flying ASX 200 gold stock again on Thursday. But why?

Read more »

Businessman smiles with arms outstretched after receiving good news.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a wonderful Wednesday session for investors today.

Read more »