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:
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
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.
For Money Morning