ASX:Z1P

Stock Analysis Report

Executive Summary

Zip Co Limited provides point-of-sale credit and digital payment services to consumers and merchants in Australia and New Zealand.

Snowflake

Fundamentals

Exceptional growth potential with worrying balance sheet.


Similar Companies

Share Price & News

How has Zip Co's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-21.5%

Z1P

-6.2%

AU Consumer Finance

0.1%

AU Market


1 Year Return

331.6%

Z1P

55.1%

AU Consumer Finance

11.9%

AU Market

Return vs Industry: Z1P exceeded the Australian Consumer Finance industry which returned 55.1% over the past year.

Return vs Market: Z1P exceeded the Australian Market which returned 11.9% over the past year.


Shareholder returns

Z1PIndustryMarket
7 Day-21.5%-6.2%0.1%
30 Day10.5%3.1%-1.1%
90 Day23.9%9.6%-1.4%
1 Year331.6%331.6%60.1%55.1%18.5%11.9%
3 Year388.1%388.1%35.2%21.6%36.4%18.1%
5 Yearn/a59.8%25.0%50.9%16.7%

Price Volatility Vs. Market

How volatile is Zip Co's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Zip Co undervalued compared to its fair value and its price relative to the market?

18.92x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: Z1P (A$4.1) is trading above our estimate of fair value (A$0.69)

Significantly Below Fair Value: Z1P is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: Z1P is unprofitable, so we can't compare its PE Ratio to the Consumer Finance industry average.

PE vs Market: Z1P is unprofitable, so we can't compare its PE Ratio to the Australian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate Z1P's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: Z1P is overvalued based on its PB Ratio (18.9x) compared to the AU Consumer Finance industry average (2.1x).


Next Steps

Future Growth

How is Zip Co forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

94.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Z1P is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2.3%).

Earnings vs Market: Z1P is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: Z1P's is expected to become profitable in the next 3 years.

Revenue vs Market: Z1P's revenue (34.9% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: Z1P's revenue (34.9% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Z1P's Return on Equity is forecast to be high in 3 years time (30.3%)


Next Steps

Past Performance

How has Zip Co performed over the past 5 years?

-32.1%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: Z1P is unprofitable, and losses have increased over the past 5 years at a rate of -32.1% per year.

Accelerating Growth: Unable to compare Z1P's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: Z1P is unprofitable, making it difficult to compare its past year earnings growth to the Consumer Finance industry (14.2%).


Return on Equity

High ROE: Z1P has a negative Return on Equity (-14.59%), as it is currently unprofitable.


Return on Assets

ROA vs Industry: Z1P is currently unprofitable, so its Return on Assets is negative.


Return on Capital Employed

ROCE Improving: Z1P is currently unprofitable, so its Return on Capital Employed is negative.


Next Steps

Financial Health

How is Zip Co's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: Z1P has a low level of unsold assets or inventory.

Debt Coverage by Assets: Z1P's debt is covered by short term assets (assets are 1.1x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable Z1P has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: Z1P is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 78.5% per year.


Financial Institutions Analysis

Asset Level: Z1P's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if Z1P has a sufficient allowance for bad loans.

Low Risk Liabilities: Z1P reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if Z1P has an acceptable proportion of non-loan assets held.

Low Risk Deposits: Z1P has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if Z1P has an appropriate level of bad loans.


Next Steps

Dividend

What is Zip Co's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%2.4%markettop25%5.6%industryaverage3.3%forecastin3Years0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: Unable to evaluate Z1P's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate Z1P's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.

Stable Dividend: Insufficient data to determine if Z1P's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if Z1P's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of Z1P's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

What is the CEO of Zip Co's salary, the management and board of directors tenure and is there insider trading?

2.5yrs

Average management tenure


CEO

Larry Diamond 0

0yrs

Tenure

AU$589,717

Compensation

Mr. Larry Diamond serves as the Chief Executive Officer and Managing Director of Zipmoney Limited. Mr. Diamond co-founded zipMoney in 2013 following 12 years’experience in retail, IT, corporate finance and ...


CEO Compensation Analysis

Compensation vs. Market: Larry's total compensation ($USD404.86K) is about average for companies of similar size in the Australian market ($USD1.00M).

Compensation vs Earnings: Larry's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

2.5yrs

Average Tenure

Experienced Management: Z1P's management team is considered experienced (2.5 years average tenure).


Board Age and Tenure

3.7yrs

Average Tenure

Experienced Board: Z1P's board of directors are considered experienced (3.7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellAU$2,116,13004 Jun 19
Regal Funds Management Pty Limited
EntityCompany
Shares623,952
Max PriceAU$3.86
BuyAU$34,43404 Jun 19
Regal Funds Management Pty Limited
EntityCompany
Shares9,125
Max PriceAU$3.84
SellAU$13,128,06523 May 19
Regal Funds Management Pty Limited
EntityCompany
Shares3,870,597
Max PriceAU$3.39
BuyAU$23,32223 May 19
Regal Funds Management Pty Limited
EntityCompany
Shares6,799
Max PriceAU$3.43
SellAU$13,073,45602 May 19
Regal Funds Management Pty Limited
EntityCompany
Shares4,856,091
Max PriceAU$3.09
BuyAU$19,60502 May 19
Regal Funds Management Pty Limited
EntityCompany
Shares12,814
Max PriceAU$1.53
BuyAU$16,90004 Apr 19
Westpac Banking Corporation, Asset Management Arm
EntityCompany
Shares10,000
Max PriceAU$1.69
BuyAU$4,68226 Mar 19
BT Funds Management Limited
EntityCompany
Shares2,517
Max PriceAU$1.86
SellAU$9,10526 Mar 19
BT Funds Management Limited
EntityCompany
Shares8,287
Max PriceAU$1.44
SellAU$35,92026 Mar 19
Westpac Banking Corporation, Asset Management Arm
EntityCompany
Shares22,879
Max PriceAU$1.57
BuyAU$34,57926 Mar 19
Westpac Banking Corporation, Asset Management Arm
EntityCompany
Shares19,620
Max PriceAU$1.86
BuyAU$2,405,11726 Mar 19
Regal Funds Management Pty Limited
EntityCompany
Shares1,614,086
Max PriceAU$1.59
SellAU$1,501,20128 Feb 19
Philip Crutchfield
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares1,000,000
Max PriceAU$1.50
BuyAU$16,333,14005 Dec 18
Regal Funds Management Pty Limited
EntityCompany
Shares15,408,211
Max PriceAU$1.06
SellAU$3,180,00205 Dec 18
Peter Gray
EntityIndividual
Role
Member of the Board of Directors
COO & Executive Director
Shares3,000,000
Max PriceAU$1.06
SellAU$6,996,00405 Dec 18
Larry Diamond
EntityIndividual
Role
Chief Executive Officer
CEO, MD & Executive Director
Shares6,600,000
Max PriceAU$1.06
BuyAU$47,52520 Nov 18
Philip Crutchfield
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares50,000
Max PriceAU$0.95
BuyAU$47,23520 Nov 18
Philip Crutchfield
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares50,000
Max PriceAU$0.94

Ownership Breakdown


Management Team

  • Martin Brooke

    Chief Financial Officer

    • Tenure: 2.8yrs
    • Compensation: AU$471.59k
  • Andy Mitchell

    Chief Growth Officer

    • Tenure: 2.2yrs
  • Larry Diamond

    CEO, MD & Executive Director

    • Tenure: 0yrs
    • Compensation: AU$589.72k
  • Peter Gray

    COO & Executive Director

    • Tenure: 4.1yrs
    • Compensation: AU$568.40k
  • Tommy Mermelshtayn

    Chief Strategy Officer

    • Tenure: 3yrs
  • Jonathan Englert

    Media & Communication Officer

    • Tenure: 0yrs
  • David Franks

    Company Secretary

    • Tenure: 0.3yrs

Board Members

  • David Shein

    Member of Advisory Board

    • Tenure: 0yrs
  • Geoff Levy (60yo)

    Member of Advisory Board

    • Tenure: 0yrs
  • John Batistich

    Non-Executive Director

    • Tenure: 1.1yrs
    • Compensation: AU$91.25k
  • Dianne Challenor

    Non-Executive Director

    • Tenure: 1.7yrs
  • Philip Crutchfield

    Non-Executive Chairman

    • Tenure: 3.8yrs
    • Compensation: AU$153.30k
  • Larry Diamond

    CEO, MD & Executive Director

    • Tenure: 0yrs
    • Compensation: AU$589.72k
  • Peter Gray

    COO & Executive Director

    • Tenure: 4.1yrs
    • Compensation: AU$568.40k
  • Nati Harpaz

    Member of Advisory Board

    • Tenure: 3.5yrs
  • Simon Schwarz

    Member of Advisory Board

    • Tenure: 0yrs

Company Information

Zip Co Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Zip Co Limited
  • Ticker: Z1P
  • Exchange: ASX
  • Founded: 2013
  • Industry: Consumer Finance
  • Sector: Diversified Financials
  • Market Cap: AU$1.518b
  • Shares outstanding: 352.93m
  • Website: https://zipmoneylimited.com.au

Number of Employees


Location

  • Zip Co Limited
  • 126 Phillip Street
  • Level 5
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
Z1PASX (Australian Securities Exchange)YesShare CapitalAUAUDSep 2015
Z1PCHIA (Chi-X Australia)YesShare CapitalAUAUDSep 2015
YRRDB (Deutsche Boerse AG)YesShare CapitalDEEURSep 2015

Biography

Zip Co Limited provides point-of-sale credit and digital payment services to consumers and merchants in Australia and New Zealand. It offers integrated retail finance solutions to small, medium, and enterp ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/23 10:35
End of Day Share Price2019/10/23 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.