Why Zip Co (ASX:ZIP) Is Getting Attention Today

Simply Wall St.08-26

AdvertisementZip Co buyback and earnings move into focus Zip Co (ASX:ZIP) has put a new share buyback on the table, with Board approval to repurchase up to 79,680,755 shares for A$50 million through ...

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These figures give investors fresh numbers to assess alongside the planned capital return.\nAt A$2.62, Zip Co’s recent share...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","BK7093":"消费信贷","BK4077":"互动媒体与服务","BK4539":"次新股","ZIP":"ZipRecruiter Inc.","ZIP.AU":"Zip Co Ltd"},"translate_title":"为什么 Zip Co (ASX:ZIP) 今天受到关注","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DCF":1,"ZIP":1.5,"ZIP.AU":1.5},"content_text":"AdvertisementZip Co buyback and earnings move into focus Zip Co (ASX:ZIP) has put a new share buyback on the table, with Board approval to repurchase up to 79,680,755 shares for A$50 million through to mid September 2027. The buyback decision arrives immediately after Zip Co reported full year 2026 results, including A$1,336 million in revenue and A$116.38 million in net income. These figures give investors fresh numbers to assess alongside the planned capital return. At A$2.62, Zip Co’s recent share price move tells a mixed story. The stock has a 90 day share price return of 19.09%, yet the total shareholder return is down 35.31% over the past year and down 62.03% over five years. The new buyback and the full year 2026 earnings release in August 2026 give investors fresh context for this shift in momentum as the market weighs growth potential against past volatility and updated capital allocation plans. Compare Zip Co's buyback story with other potential capital return opportunities by scanning our hand picked 14 high quality undervalued stocks that may be drawing fresh attention from the market. Bulls point to Zip Co’s A$116.38 million profit and fresh buyback. Bears focus on the share price slide over one and five years. As you weigh the numbers, which side does the current valuation seem to support? Most Popular Narrative: 2.7% Overvalued Zip Co last closed at A$2.62, while the most followed narrative on the stock, according to Kallan, sets fair value at A$2.55 using an 11% discount rate. That gap is small, yet it reflects a detailed view on how this Buy Now Pay Later lender and payments company might be priced.  I firmly believe that for BNPL companies, you MUST modify the generic fundamental analysis principles of Profitability, Low Debt, P/E, EPS, etc, in order to receive a more accurate company valuation. You have to view BNPL companies as short term lenders and payment companies, so your metrics for valuations would look more into transaction margin and net credit loss rate to loan book value, similarly to other lenders or banks.  Read the complete narrative. Curious what sits behind that A$2.55 fair value for Zip Co. The narrative leans on specific revenue growth, profit margins and a future earnings multiple that may surprise you. Result: Fair Value of A$2.55 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Zip Co’s narrative could be tested if credit losses rise or revenue growth slows, especially in light of the company’s recent share price declines. Find out about the key risks to this Zip Co narrative. Another View on Zip Co’s valuation The user narrative pegs Zip Co at A$2.55 using a price to sales lens and calls the stock overvalued at A$2.62. Our DCF model tells a very different story. It points to a future cash flow value of A$4.02, which implies the shares trade at a sizeable discount. Which version of “fair” do you think the market is more likely to lean toward over time? To see how this cash flow based view is built and what would need to change for Zip Co's valuation signal to flip, Look into how the SWS DCF model arrives at its fair value. ZIP Discounted Cash Flow as at Aug 2026Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Zip Co for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 14 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. Next Steps Sentiment on Zip Co is clearly split, and the mix of risks and potential rewards is front and centre right now. If you want to move quickly and shape your own view based on both sides of the story, start by reviewing the 3 key rewards and 1 important warning sign. Looking for more investment ideas beyond Zip Co? If you stop with Zip Co, you miss a wider set of opportunities. Use the screener to pressure test your thinking and uncover ideas you might otherwise overlook.  Spot potential bargains early by scanning a 14 high quality undervalued stocks that could offer stronger fundamentals relative to current prices. Strengthen your downside protection by checking a list of solid balance sheet and fundamentals (20 results) so you are not relying on hope when markets turn. Broaden your opportunity set by tracking a 10 high quality undiscovered gems that the wider market may not be watching yet.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n        and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n        financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n        Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n        Simply Wall St has no position in any stocks mentioned.Valuation is complex, but we're here to simplify it.Discover if Zip Co might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. 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