Zip Co Ltd (ASX: ZIP) shares are pushing higher on Thursday.
At the time of writing, the buy now pay later (BNPL) provider's shares are up 1.5% to $3.20.
This latest gain means that its shares are up a whopping 350% since this time last year.
To put that into context, a $10,000 investment in Zip shares a year ago would now be worth a cool $45,000.
Unfortunately, one broker is now calling time on the rally and is recommending that investors hit the sell button.
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Time to sell Zip shares?
John Athanasiou from Red Leaf Securities thinks that it could be time to take profit after the stellar gains recorded over the past 12 months.
Speaking to the Bull, Athanasiou said:
This buy now, pay later provider delivered an extraordinary performance in calendar year 2024, with its share price soaring from 57 cents on January 18 to trade at $3.02 on January 16, 2025. The company delivered revenue of $868 million in fiscal year 2024, up 28.2 per cent on the prior corresponding period.
First quarter revenue of $239.9 million in the first quarter of fiscal year 2025 was up 18.8 per cent on the prior corresponding period. The US business is also performing well. However, ZIP co-founder Larry Diamond sold $100 million of ZIP shares in early December 2024 after stepping down as a director and US chairman. Investors may want to consider taking some profits as well.
Or is it time to buy?
It is worth noting that not everyone agrees with Red Leaf Securities' view of the stock.
Recent notes out of UBS, Jefferies, and Ord Minnett reveal that their analysts believe that Zip shares can keep rising from here.
According to a note out of UBS, its analysts have put a buy rating and $3.65 price target on the company's shares. This implies potential upside of 14% for investors over the next 12 months.
Whereas Jefferies has a buy rating and $3.80 price target on its shares. This suggests that they could rise almost 19% from current levels.
Jefferies is confident in Zip's ability to add customers in the United States, where it has partnerships with Stripe and Google. It also notes that the CEO has previously spoken about talks with Apple.
Combined with its belief that the company could be an attractive takeover target, it feels there's potential for its shares to re-rate to higher multiples in 2025
Finally, Ord Minnett currently has a buy rating and $3.60 price target, which implies potential upside of 12.5% for investors.
