ZIP (ASX) $2 PARTY

Originally posted by nakervirus: ↑

I honestly don't understand all the negativity here - unless its just people trolling or with their own agenda.

Just some points to below to address some of the misinformation above:

Regal most recently notified purchases were around $1 - not in the 80s.

Directors haven't been buying - but we've established that if there is a takeover going on they wouldn't be permitted to anyway. So I'd say it's worth waiting until a takeover happens or definitely isn't happening before constantly wanting the directors to buy more shares.

Regarding quarter 3 being bad, it's all relative - and should be compared to Q3 last year. But to quote Cynthia from her interview, "I'm really pleased we've delivered 2 strong quarters in the first half, and we will continue to do that." We all know Q2 is their best quarter and will almost certainly be better than their Q3 results. But compared to Q3 last year, the results this quarter will almost certainly be better and still be showing the strong trajectory they have demonstrated over the past couple quarters.

Regarding the constant remarks about being overvalued - do you think Zip was overvalued pre covid (January 2020) when share price was $4+? Do you think Sezzle is overvalued now? Do you think Afterpay was overvalued when it was purchased? Do you think Affirm is overvalued now? Just trying to establish if you think all the companies are overvalued - or simply Zip.

All the evidence from the financials indicate the company will almost certainly be profitable next year.

As I posted previously, simply have a look at the trajectory:

See comparison below for 1H23 v 1H24:
Revenue increased from $333.5 million to $430 million ($96.5 million increase)

Interest expenses increased from $65.4 million to $98.3 million ($32.9 million increase)
Bad debts increased from $86.1 million to $93.5 million ($7.4 million increase)
Bank fees increased from $61.3 million to $62 million ($0.7 million increase)

So effectively, with a $96.5 million increase in revenue, there was an increase of $41 million in associated costs.

This is also in a period of high interest and high inflation. I firmly believe that they have shown they can keep bad debts under control, and that as interest rates drop and inflation settles the bad debts will also drop further as consumers will have more relief from their home loans etc. In addition, over the next couple years as interest rates are dropped back down, I have no doubt Zip will refinance their loans at lower interest rates which will decrease their interest expenses. BNPL is still also only a very small portion of the whole market, and independent studies have shown they expect this sector to grow signficantly over the next 5 years.

So over the next 5 years, revenue will increase as indicated by the studies, and interest expenses and bad debts will reduce.

So we also need to look at operating costs:
Salary expenses decreased from $83.2 million to $72.5 million ($10.7 million decrease)
Marketing expenses decreased from $25.7 million to $21.2 million ($4.5 million decrease)
IT expenses decreased from $23.5 million to $20.8 million ($2.7 million decrease).
Other expenses increase from $23.7 million to $34.9 million ($11.2 million increase).

So effectively, with a 96.5 million increase in revenue, there was a decrease of $6.7 million in operating costs. Which means they can continue to grow without increasing operating costs significantly (and in fact they probably could reduce operating costs further if they felt it was needed).

As far as I'm concerned, there is virtually no doubt that they will be profitable next year.

I believe a $3 share price is very achievable within the next 18 months.

Expand

What are the Q3 2023 numbers?
Would be good to see what we need to beat?

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(20min delay)
Last $1.46		Change -0.035(2.34%)		Mkt cap ! $1.644B

Open	High	Low	Value	Volume
$1.50	$1.54	$1.45	$19.96M	13.39M

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