This report is an updated version of the report published on 16 April 2025 at 1:48 PM AEST.

Zip Co Limited (ASX: ZIP)

Zip Co Limited (ASX: ZIP) engages in the provision of digital retail finance and payments solutions to consumers, and small and medium sized merchants in Australia, New Zealand, Canada, and the United States.

Recommendation Rationale – SELL at AUD 2.02

• Rising net bad debts: Net bad debts increased to 1.93% of TTV in Q3 FY26 vs 1.80% in Q2 FY26, indicating slight deterioration in credit quality
• Overvalued Multiples: On a forward 12-month – key valuation multiples (EV/EBITDA and Price/Book, and Price/Earnings) are higher than average of the Financials’ sector.
• Technical Commentary: Rallying within a broader downtrend, ZIP's stock price is approaching significant resistance near the neckline of a Head and Shoulders pattern spanning from June 2025 to January 2026, suggesting a potential correction. The stock is currently trading above both the 21-day and 50-day simple moving averages (SMAs), which may serve as dynamic support levels, while the aforementioned neckline acts as overhead resistance. A major support level is identified at AUD 2.020, with critical resistance positioned at AUD 2.500.
• Business Risk: Limited earnings visibility stems from uncertain consumer demand amid economic pressures, while intensifying competition erodes margins through pricing battles. Execution challenges arise in scaling international operations across diverse regulatory landscapes, risking operational disruptions and compliance burdens.

ZIP Daily Chart

Daily Technical Chart, Data Source: REFINITV

Considering the macroeconomic uncertainty, current trading levels, limited visibility on FY26 performance, and risks associated, a ‘Sell’ recommendation is given on the stock at the current price of AUD 2.020, as of 16 April 2026 at 1:00 PM AEST.   

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 16 April 2026. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices