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Zip shares gain 3.6% following landmark Big W partnership

Here’s everything you need to know about Zip’s latest deal with the retail giant Big W.

Zip, the A$352 million, financial technology company has capped off a stellar year, revealing a landmark partnership with Big W today.

In response to this announcement, investors bid Zip’s shares as much as 3.6% higher during today’s trading session.

Year-to-date, the company’s share price has now risen 196%.

Details of the Big W partnership

Centrally, this partnership will mean that Big W will soon offer Zip’s interest free payment solutions to its customers.

Commenting on the partnership, Zip’s CEO and Managing Director, Larry Diamond pointed out that:

‘We are delighted to partner with another well known brand in Big W. We believe Zip will be a great fit for Big W, providing their customers with a better way to pay for their everyday products and purchases.’

The share price gains we saw during today’s session are hardly surprising when you consider that in Woolworth’s third quarter, it was revealed that Big W posted revenues of A$721 million.

As such, investors will likely be keen to see a potential uptick in Zip's transaction volume off the back of this ‘large’ deal.

The company noted that 'it is anticipated that Zip will be live with Big W within the first half of FY20.'

Zip’s share price: financials in focus

Zip (ASX: Z1P) has been successful in carving out a niche in the fast growing payments market in the last couple of years, already counting the likes of Target, Tiger Air, Kogan, Office Works and now Big W as key merchant partners.

Ultimately, this latest deal underscores Zip’s growing presence in Australia.

For example, in Zip's last Q4 update, the company reported record revenues of A$27.0 million, up 17% from the quarter prior.

Moreover, user growth continues to trend upwards at an impressive rate – with Zip's total customers hitting 1.3 million in Q4 – up 14% from the third quarter.

Finally, transaction volume more than doubled on a year-over year basis, up 108% to A$1.1 billion.

Analysts also like what they see

Investors are clearly impressed with Zip’s growth story; as we noted at the start, shares of the young company have risen 196% YTD.

Adding to the bullishness around the stock, investment firm Shaw & Partners just recently raised their price target on Zip by 19% to A$3.90 per share.

As of 15:30 AEST, that would imply a potential share price increase of 17%.


The information 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 Bank S.A. 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 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. See full non-independent research disclaimer.

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