Z1P - The Rise To $15.00, page-294

Yes, bad debt is the biggest concern of the sector due to macro economic issues but what if I tell you that zip has way better bad debt wrote off in the sector compared to its peers.

APT wrote off 100 million out of its 500 million revenue whereas zip wrote off 25.8 million out of its 160 million income. But there is a reason why market value APT more than zip because APT cycles its loan book 6 times a year at better rate whereas zip cycles only 2 times.

Sector is continuously scanning the market with new customers hence bad debt is byproduct in the due course. It is not difficult for these companies to stop the growth & work with existing pool of merchant & customers by giving them exclusivities & loyalty programs to become cash flow positive & start paying dividends but do these companies want to do that when there is potentially a 22 T $ market & together APT & ZIP are merely 10 b TTV. But then who will buy this stock, I prefer CSL over these. Hence bad debt is a concern which can only be offset at a CAGR of 80% of receivable book.

5 years from now if ZIP grows a receivable book of 15b $ and bad debt at 7% then market will happily accept MC of 30b $ IMO