Zip Co Ltd

ZIP: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$8.90	Btnvz	Lhbdjwjj

Zip: Commoditized Nature Evident

Shaun Ler

Oct 30, 2023

We trim our fair value estimate on Zip by 5% to AUD 0.40 per share after lowering our projected transaction volumes. Price elasticity is notably high for a no-moat business like Zip. As the group continues to implement fee increases to bolster profitability amid rising interest rates, we expect this to adversely affect transaction volumes. This is due to the availability of alternative buy now, pay later tools and the looming prospect of a downturn in consumer spending. We retain our Extreme Morningstar Uncertainty Rating.

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