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Source from AFR

Zip boss frustrated by stock's valuation relative to Afterpay

Tom Richardson

Peter Grey, the co-founder of Australia's second-largest buy now, pay later player Zip Co, has labelled its December quarter result "absolutely cracking" and questioned investors' reluctance to value it on similar multiples to rivals Affirm, Afterpay, and Sezzle.

On January 14 during Affirm's Nasdaq debut, investors nearly doubled its value to around $US30 billion. This lit a fire under Afterpay and Sezzle, with Zip still playing catch-up.

Peter Grey, working from home in North Ryde. The Zip co-founder says the company is significantly undervalued versus peers when using sales multiples. Louie Douvis

For the December quarter, Zip reported total customer numbers virtually doubled year-on-year to 5.7 million on total merchants up 73 per cent to 38,500.

This growth translated into quarterly revenue soaring 88 per cent year-on-year to $102 million, with annualised revenue of $480 million based on December's result.

"Our view would be on the revenue multiples we're significantly undervalued when directly compared to Afterpay and obviously Affirm," Mr Grey said.

"Even if you looked at us as a direct comparison to Sezzle, we would appear undervalued, and I think that one of the opportunities for us as we go to market this year is to bridge that valuation gap.