Zip share price has done well this year, rising by over 365%, and making it one of the best-performing companies in Australia. It has soared by over 1,050% from its lowest level in 2023, pushing its market cap to over A$3.8 billion.
Why ZIP share price has soared
Zip is a leading technology company that has gained substantial market share in Australia, New Zealand, and the United States.
It is a leading player in the Buy Now Pay Later (BNPL) industry, where it lets customers buy for products and services and pay for them in equal installments.
Like Affirm, the company does not charge interest for some of its loans, and instead, it makes money from the commission it charges the merchants. It charges loans in some of its other services like Pay in 8.
The company’s stock has done well because of the ongoing improvements in the industry. For example, in the United States, Affirm stock has jumped by about 700% from its 2023 lows.
Similarly, in Europe, Klarna has started the Initial Public Offering (IPO) process in the United States. Just this week, it added companies like Bank of America, Barclays, Deutsche Bank, and Citi to be the joint bookrunners. Analysts expect that the company may receive a $20 billion valuation, much higher than its pandemic valuation.
Zip share price has also done well after the company’s business continued well in the United States.
The most recent financial results showed that Zip’s revenue rose to $868 million from $677 million a year earlier. This revenue came as the total transacting volume jumped by 14% to over A$10 billion.
The growth has continued in the first quarter of the 2025 financial year. The TTV rose by 22% during the quarter to $2.8 billion, while its revenue rose by 18.8% to $239 million.
ZIP has continued to add more customers in the three countries where it operates. Its active customers rose to 6.08 million, while the number of merchants rose to 80k. Firms like Cathay Pacific and GameStop were some of the most recent customer additions.
Therefore, the Zip share price has done well because of its continued growth of its business in the United States. While its market share there is small, the management hopes that it will continue to grow over time.
Most importantly, the company has reported record profitability. In the last financial year, its group EBITDA rose to over $78 million. This is notable since Affirm has struggled to become profitable.
Zip share price forecast
The daily chart shows that the ZIP stock price may be at risk of a harsh reversal in the next few months. First, it has formed a double-top chart pattern at $3.54. In most periods, a double-top is a popular bearish sign in the market. It has already dropped below the neckline at $3.06.
Second, the stock has formed a rising broadening wedge chart pattern. This pattern is made up of two rising and diverging trendlines. It usually leads to a strong bearish breakout over time. Also, it has moved below the 50-day Exponential Moving Average (EMA).
Therefore, after having a spectacular performance this year, there is a risk that it will have a strong bearish breakout in the coming days. If this happens, the next point to watch will be at $2.0, which is about 31% below the current level.
More Zip stock price gains will be confirmed if the stock rises above the double-top point at $3.54.
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