Zip share price: where next following ‘transformational’ year?

The share price of popular ASX-listed BNPL company Zip (ASX: Z1P) has been in a clear downtrend over the last month, with the stock down 10.39% in that period. Despite that short-term weakness, the stock remains up 23% YTD, a solid result but likely disappointing for those trading into the stock around February, when the company peaked at $14.53 per share.

A solid set of full-year (FY21) results – released to the market a couple of weeks ago – wasn’t effective in reversing the stock’s recent downward trend, with Zip continuing to fall in their wake.

Below we unpack those results as well as look at what a number of key analysts have said of them.

FY21 Results in Focus

Across the top-line Zip continued to report exceptional growth, with both revenue, transaction volume and transaction numbers hitting record highs.

From a volume perspective, the company reported total transaction volumes for the full year of $5.8 billion, implying a year-on-year growth rate of 176%. This was built off the back of 41.3 million transactions, itself a 293% year-on-year increase.

Revenue grew almost as quickly, rising 150% year-on-year.

As with the performance of those key operational figures, Zip also continued to attract new active users in the new year, with total customers surging 248% year-on-year to hit 7.3 million. This was supported by a good bump in merchant numbers, which slightly more than doubled, to hit 51.3 thousand by the close of fiscal 2021.

The company also maintained a good credit profile: full-year cash transaction margins were 3.5%; while net debts, expressed as a percentage of total transaction volumes, came in at 1.28%.

Elsewhere and from an engagement perspective, management said the Zip app was downloaded 5 million times in fiscal 2021.

Commenting on those results, Zip's MD and CEO, Larry Diamond said:

'This has been a truly transformational 12 months as the business has continued to deliver, despite the most exceptional global economic conditions.’

'We fearlessly started the year with a clear strategy for both local growth and global expansion, and pleasingly, 12 months later, we are delivering on this plan, with record growth across all metrics in all jurisdictions, with Zip now operating in 12 countries across five continents.'

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FY22 outlook

Looking forward, management said they had seen good momentum into FY22 with the company report 'FY22 year-to-date transaction volumes up 58% YoY in AU, and up 240% YoY in the US.'

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