Zip Co Ltd Share Price Edges Down on Quarterly Results (ASX:Z1P)
The buy now, pay later sector (BNPL) is proving to be one of the major winners throughout the COVID-19 pandemic, with the Zip Co Ltd [ASX:Z1P] share price being one of the benefactors of the strange times we are living through.
Having shot up over 650% from the low in March, at the time of writing the Z1P share price is trading at $6.87, a decline of 12.60% from its recent peak. Is the run up over?
What’s happening at Zip Co?
The shift to e-commerce during the pandemic has lit a fire under a number of BNPL stocks.
Both Z1P and Openpay recently released their quarterly results.
Z1P reported revenue up 91% compared to the same time the previous year and OPY reported their total transaction value up 98.2% compared to 2019.
With a large economic hit on the cards for Australia, and the unemployment rate now sitting above 7%, there is a legitimate question to be asked.
Can or will people keep spending and pushing stock prices higher in the BNPL sector?
Where to from here for the Z1P share price
Z1P currently has a market cap of $2.75 billion. And they recently announced the acquisition of US-based BNPL company QuadPay, as well as a dramatic increase in customer numbers.
As great as all this sounds — it may not be enough to continue the run up.
Looking at the Z1P share price chart, you can see it ran up to the all-time high of $7.88 in early July, before falling back. If this decline were to continue, levels of $6.61 and $5.72 may provide future support.
Yet should the price turn back to the upside, then levels of $7.00 and the previous all-time high price of $7.88 may come back into focus for future resistance.
For Money Morning