See the usual candidates who are "not paid by shorters" but on here all day every day, disparaging the stock to their all too willing audience.
Guys, its an extremely large and complicated business and requires similar analysis, which few are prepared to do.
ZIP was ridiculously priced in 2021. But the same old criticisms on here for the over a year now, since July 2022, when ZIP first reversed its very scary and worryingly falling crucial metrics as a financial business, are clearly no longer valid.
ZIP has reduced its open note convertible debt from $500 million to $138 million in a year! The balance will still need to be repaid or converted to shares, but its previously arguably far too high debt overhang has been vastly reduced. This a strongly argued reason for ZIP's demise on Hot Copper. Reined right in (at the expense of dilution - unlike my shorting friends, I am prepared to be objective)
ZIP has consistently raised revenues (+16% to $693 million this year) in the last year, whilst actually slightly reducing customers (more risky ones particularly) at times.
It has again raised revenue margins, +60bps to 7.8%, and is above medium-term targets of 7.0-7.5%. This is the bread and butter of the business and the main argument a year ago that ultimately ZIP and BNPL was not a sustainable business - clearly those calls were wrong and the present ones above even more so with ZIP going cash flow positive. Cash transaction margins now at 3.1% for the last quarter. 2.8% for the year. People were quite rightly saying if they went below 2% in June last year that the business would likely go bust. Its flown close to the sun, but ZIP has survived.
Its net bad debts as % of TTV at group of 2% (target of <2%), again they were close to 3% last year and that was absolutely unsustainable given the other margins ZIP was showing. That is incredible and way better than my expectations in the fastest rising interest rate environment of all time - they have drifted back up a little after being very slightly lower at times in the last year - oh dear, there is that objectivity again.
Literally ZIP US is exiting FY23 cash EBTDA positive, NZ reported a positive cash EBTDA result for FY23. ZIP AU has been positive for five years (something I commented on a year ago on these threads and was literally lied about by shorter paid liars on these threads and yes am still bitter about - I don't like dishonesty going unpunished/checked).
If you guys just look at the share price, you are missing the dilution effects of recent debt removal and raises. That said ZIP near all time lows in terms of mkt cap and that makes ZIP a buy to me. ZIP's worse risk environment was a year ago IMO. It has in that time reduced its debt significantly. It has raised its revenues and improved its debt and business metrics to suggest sustainable business practice. I don't like Larry that much for his stupid hubris and belligerence in the past, but have to hand it to him, the business turn around in such an oppressive business environment (Central Bank amplified debt cycle) has been remarkable. Perhaps that reflective of just how poorly the business was run in the past. That was then this is now.
ZIP will be profitable in 1HFY24 - with added guidance for 2HFY23 to be positive for the full half. I don't know who is selling down here, but its well after the horse has bolted and been well and truly corralled again. I like buying companies on the verge of going cash flow positive, before the markets really pick up on it. This one is staring the mkts in the face and I openly admit I have over-estimated their efficiency by buying in a little too early, but am buying more here.
(Well done to shorts btw [not their feeble narrators on here], I was one myself in 2021 - but its now a very risky proposition with ZIP's value this low)
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