Ann: Q3 FY22 Results - Zip Accelerates Path to Profitability, page-156

interesting from Citi

BUZZ-Citi sees Zip's qtrly U.S. customer add-ons highlighting upside potential
Friday, 22nd April 2022, 10:39:50 am

Relevant Stocks:

ZIP

• Citi sees Australian buy-now-pay-later firm Zip's (ZIP) third-quarter update as positive with customer growth in the U.S. accelerating and the company reducing costs faster than expected
• Notes that U.S. customer adds of ~0.9 million customers in Q3 2022 (Oct-Dec) was up from ~0.7 million in Q3 2021 even on the back of tightening risk settings and lower app downloads QoQ
• Says stronger-than-expected growth on the back of enterprise merchant additions represents upside potential for ZIP
• However, the brokerage rates ZIP Neutral/High Risk on concerns about the potential for bad debts in Australia to remain elevated and the impact on top-line growth from cost reduction measures
• While customer growth in all regions was above expectations, total transaction volume (TTV) missed expectations, with US TTV coming in -15% below our forecasts-Citi
• One of nine analysts rate the stock "buy", three "hold" and five "sell" or lower, their median PT is A$1.70 - Refinitiv data
• Stock has fallen 74.7% this year as of last close, vs a 0.5% increase in the benchmark S&P/ASX 200 index