Zipping into a BNPL favourite on ******
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Zipping into a BNPL favourite

(ASX: ZIP)

2 Sep 2024

Key points:

• Positive reporting season for financial services and BNPL sectors

• Zip's impressive turnaround and growth projections

• Optimistic outlook on US market conditions and Zip's future performance

Jonathan Higgins from Unified Capital Partners shares insights on recent financial services and buy now, pay later sector performance. Jonathan observes that the reporting season is broadly positive, with good results being rewarded and market liquidity on the rise. Unified Capital Partners outperforms the market significantly, suggesting buoyancy in the sector despite past volatility.

Specifically focusing on Zip (ASX: ZIP), Jonathan highlights it as one of the best performers, turning around cash earnings by over $120 million. With strong growth projections, Zip aims for a cash earnings margin of over 1% in FY25 and expects to grow its US operations by 30% per annum. Jonathan notes significant management achievements, including partnerships with major players like Stripe, Google Pay, and Adyen, contributing to optimistic growth prospects for Zip.

Jonathan also points out broader US market conditions, mentioning positive retail sales data, supportive trading conditions, and potential interest rate cuts. He remains confident in Zip's long-term viability in a competitive market and recommends it as a constructive buy, particularly for the next six months.