Are ZIP co Ltd (ZIP) shares worth buying back into?
Hi guys, I have had ZIP shares and sold out. I thought there results were good. Would it be worth buying back? Cheers Wayne
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Answer
Hi Wayne,
ZIP was hammered over 25% following the release of a mixed quarterly earlier this week. While U.S growth was strong, it was in line with market expectations, conversely Australia & New Zealand numbers, the biggest contributor to revenue and earnings, were soft and didn’t justify the recent strong run by the payments business. Moving forward, the ANZ business will need significant marketing spend to boost revenue and this cost will hit the bottom line.
Ultimately, the result was okay, just the shares were priced for perfection (and some). The risk/reward has now improved a lot, but we’d need to see an improvement on the ANZ side before we consider it again, having exited back in December, taking a solid profit around ~$3.
- MM remains neutral on ZIP and have no immediate plans to re-enter.
