Zip Share Price Surges and Falls on Quarterly: Zip Biz a Potential Catalyst (ASX: Z1P)

At time of writing, the share price of Zip Co Ltd [ASX:Z1P] is down 2%, trading at $4.42.

The Zip share price has seen a remarkable return of 367% for the year, snapping a retracement over the last four sessions after a run up to an all-time high of $5.86 on 14 October:

ASX Z1P - Zip Share Price Chart

Source: tradingview.com

We take a look at the highlights from the Zip quarterly, and discuss the potential of their Zip Biz segment to drive future share price growth.

Highlights from quarterly drive Zip share price up, initially

With the announcement released prior to trading, the Zip share price surged on open up to $4.68, then started to settle around the $4.35 range.

It then slid as low as $3.95.

Here are the highlights from the quarterly:

  • Record revenue of $31 million up 15% on last quarter
  • Receivables up 15% to $783.6 million
  • Transaction volume up 111% to $402.1 million
  • Customers up 147,000 to over 1.4 million
  • Agreement to acquire PartPay
  • Stake in QuadPay up to 15%
  • Acquisition of SpotCap
  • 1.68% net bad debts

It also provided a regulatory update claiming that:

As a business, Zip is extremely well positioned to satisfy any potential changes to regulation with little-to-no disruption to our business model.

Of the highlights, the acquisition of SpotCap strikes us as the most interesting…

Zip Biz could be a key driver for the company

We previously discussed the merits of QuickFee Ltd’s [ASX:QFE] business model, which focuses on professional service firms.

It is clear from the SpotCap acquisition that the next frontier for Zip is clearly the SME world.

This has traditionally been the domain of the Big Four.

The SME loan market is worth around $77 billion a year and $70 billion of this is done by the Big Four.

At the moment, NAB has a 25% market share for companies with turnover of between $.1 million and $5 million.

It has been pushing its QuickBiz lending platform, with 45% of all its small business lending accounts now opened via the platform.

So if Zip can manage to penetrate this lucrative market and steal market share, its prospects could improve.

If you are excited about the potential of Zip, this fintech report profiles three stars, two of which you probably haven’t heard of.

Regards,

Lachlann Tierney,
For Money Morning


Lachlann Tierney is a writer for Money Morning and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. Recently he has been working with Ryan Dinse. Ryan is involved in three publications:


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