Love it. Posters disparaging millions of ordinary solvent Aussies who use BNPL's, whilst they face rising mortgage interest rates and cost of living costs. The usual excess and costly company debt accusations, valid in 2021 but not September 2023 against the much changed business and reduced debt burden. Whilst others were arguing doom and gloom, I was arguing a year ago on here, that indebted, but ultimately "solvent" ordinary Australians (and Americans) would turn ever more to BNPL for budgeting in a tightening economic environment.
Fact:
ZIP reduced its debt load from $500m at the end of FY22 to $180.5m as at August 2023 (and another $10mill since)
Fact:
ZIP has consistently increased revenues (+16% YoY) from a slightly reduced number of active number of customers (removing more risky users) in a rising interest rate environment.
Fact:
ZIP has increased its revenue margins +60bps to 7.8%, above medium-term targets of 7.0-7.5%
Fact:
ZIP has improved cash transaction margins in its core businesses (ANZ, Americas and ZIP Business) to 3.1% for 4QFY23 (and 2.4% for the FY23)
Fact:
Net bad debts as 2% of TTV at 2% per its target (and US credit loss rates improved to 0.85% of TTV - arguably ahead in the credit cycle to Australia)
The usual down-rampers on here can't even make a comprehensive financial argument against ZIP, just the same old banal, and very old, rhetoric. Guidance and every improving financial metric says ZIP will be running at profitability at financial ear end. Go look at wholesale money markets. Forward costs are lower and falling. The worse is over according to money markets. ZIP has survived. If you wanted to make a comprehensive argument against ZIP going cash flow positive and profitable, it would have to be the money markets are wrong (entirely possible), or ZIP suddenly puckers up on its continuously seen revenue increases (which have beat my expectations).
Savvy consumers? I think she should say basically, everyday rationally thinking, technically solvent, if indebted by heavy mortgages, ordinary Aussies using ZIP more and more - but no one would like such honesty about the indebtedness of your average Australian. Savvy investors would do well to ignore the relentless barrage of negative sentiment on Hot Copper and just look at the improving business figures, ignoring the noise on here. ZIP even with a heavy risk probability discounting its price is absurdly cheap.
Like mkt cap to yearly revenue ratio of <0.4 in a company going cash flow positive and consistently reporting double digit revenue growth. Jeez, the mkts (ergo investors) are dumb/fickle sometimes. That ratio read >10 in some similarly staged US stocks in late 2021.
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