English
Stock of the day
Zip
Despite stronger earnings and expanding transaction volumes, Zip’s latest update triggered a steep sell‑off as investors focused on revenue margin pressure and growing US credit stress.
(AI video summary)
This video was created on 19 February 2026 for IG audiences by ausbiz.
ASX code: ZIP
Zip plunges 35% despite record cash EBITDA
Zip, a key player in the buy now, pay later (BNPL) sector, saw a sharp share price drop following its latest earnings report. As of midday in Sydney, Zip shares fell approximately 35.37%. This occurred despite the company reiterating its full-year (FY) 2026 guidance and reporting a record increase in cash earnings before interest, taxes, depreciation, and amortisation (EBITDA), up nearly 86%.
Growth meets margin pressure
Results showed a lift in total transaction volumes led by Zip's United States (US) operations, with active customers up 4% and US users rising nearly 10%. However, the market was unsettled by slight declines in revenue margins and net bad debts rising to 1.7% of total transaction volume. Chief Executive Officer (CEO) Cynthia Scott has hinted at a potential dual listing in the US, dependent on market conditions, and she will be based there.
Investment outlook
Analysts noted high expectations were not fully met. Margins were compressed due to lower US margins. Despite transaction volume growth, analysts suggest patience due to the stock's fluctuating nature and economic pressures, especially in US credit markets.
Important to know
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Ready to open an IG account?
Start your trading journey now
Follow us online:
