The buy now, pay later company released its April 2026 trading update earlier in the session. Investors responded positively to the numbers. The result reinforced confidence in Zip’s growth trajectory.
The company has been building on a strong third quarter, and April data suggests that trend is holding. Markets took note of the consistency. The update covered performance across the US, Australia, and New Zealand.
Zip Co shares climbed 4.76% after the company reaffirmed FY26 guidance and strong US growth targets. [Motley Fool]
US Total Transaction Volume Surges Past 40% Growth
The standout figure in the April update was US total transaction value (TTV) growth. Zip reported year-on-year TTV growth of more than 40% in US dollar terms for the month of April. That matched the company’s full-year target, which calls for the same growth rate.
This result is significant because it shows April was not a slowdown month. Growth held steady despite broader macroeconomic uncertainty. The US market continues to drive Zip’s overall performance.
Zip operates across the US, Australia, and New Zealand. However, the US segment is clearly the engine of the business. April’s data confirmed that position once again.
Zip Co Reaffirms Full-Year FY26 Guidance Targets
Alongside the April update, Zip reaffirmed its full-year FY26 guidance. The company expects group cash EBTDA of A$260 million, US TTV growth of more than 40% in US dollar terms, an operating margin of 18%, and a revenue margin of 8%.
The reaffirmation sent a clear signal to the market. Zip is not pulling back from its earlier commitments. The consistency between guidance and trading data strengthened investor sentiment.
The April result aligned directly with that full-year target. That alignment matters when investors assess management credibility. Zip has now confirmed its trajectory across multiple consecutive updates.
US Credit Outcomes Track Below 1.75% Target for Q4 FY26
Credit quality remains a central point of focus for Zip. US credit outcomes are performing in line with expectations and are forecast to improve to below 1.75% of TTV in the fourth quarter of FY26.
That figure represents an improvement on recent quarters. Credit losses stood at 1.84% of TTV in Q2 FY26 and 1.86% in Q3 FY26. A further reduction in Q4 would confirm a clear downward trend.
This matters for investor confidence. BNPL companies often face scrutiny over bad debt levels. Zip’s improving credit metrics provide a counter-narrative to that concern.
CEO Message Reflects Confidence in Group Momentum
Zip’s management addressed the update directly. Chief Executive Officer Cynthia Scott stated: “Momentum has continued across the group in April, with US TTV year-on-year growth of more than 40 percent in US dollar terms and credit outcomes performing in line with expectations.”
Zip Co CEO Cynthia Scott said momentum continued across the group during April 2026. [AFR]
The statement reinforced the tone of the broader update. Scott’s message pointed to consistency rather than a one-off spike. The company framed April as an extension of an existing trend.
The language used by management was measured. There were no sharp revisions or surprise announcements. The update served primarily as confirmation of the direction Zip has maintained through FY26.
Australia and New Zealand Segment Holds Steady
The domestic segment also featured in the April update. Zip reported that its Australia and New Zealand business now serves 1.9 million highly engaged customers, representing approximately 10% of the Australian adult population.
The ANZ market is more mature than the US operation. Growth in that segment has been steadier and less dramatic. Still, Zip flagged these customers as highly engaged, pointing to retention strength.
Australia remains a meaningful contributor to group revenue. While the US captures most of the growth narrative, the ANZ segment adds stability. A balanced view of Zip’s business includes both regions.
Strong Q3 FY26 Results Provide a Solid Foundation
The April update did not arrive in isolation. Zip reported record cash EBTDA of A$65.1 million for the three months ended 31 March 2026, a 41.5% increase on the prior corresponding period. Operating margin expanded to 19.4% from 16.5% a year earlier. Total transaction volume reached A$4.0 billion, up 22.4% year on year, and total income rose 20.2% to A$335.2 million.
The US segment led Q3 growth. US TTV surged 43.1% in US dollar terms to US$2.12 billion. Active US customers grew 9%, adding 375,000 accounts, while merchants on the platform rose 17.9%.
Those Q3 results set a high bar. April’s trading data suggests Zip has not fallen below it. The company enters the final quarter of FY26 with its key metrics intact.
Analyst Sentiment Points to Further Upside for ZIP Shares
Market analysts have maintained a broadly constructive view of Zip Co. Eleven analysts currently rate the stock as a buy or strong buy. The average price target sits at A$3.83, with the highest analyst target at A$5.40.
Those targets imply significant upside from Thursday’s last traded price of A$2.640. At the average target of A$3.83, that represents potential gains of around 45%. The highest target of A$5.40 implies upside of more than 100%.
These figures do not guarantee future performance. Price targets reflect analyst models and assumptions, not guaranteed outcomes. However, they reflect the level of institutional confidence in Zip’s current trajectory.
ZIP Share Price, Volume and Market Data
Zip Co Ltd (ASX: ZIP) shares gained 4.76% on Thursday, adding A$0.120 to reach a last traded price of A$2.640. Trading volume reached 24,447,029 shares on the day, with the bid and offer range sitting between A$2.630 and A$2.640. Zip’s market capitalisation stood at A$3.16 billion as of Thursday’s session.
Zip Co shares traded more than 24 million shares during Thursday’s session on the ASX. [ASX]
Thursday’s volume of over 24 million shares points to strong investor participation. The market capitalisation of A$3.16 billion reflects how far sentiment has shifted over the past year. Earlier concerns about profitability and credit quality have given way to a more measured outlook.
Over the past year, Zip Co shares have risen 43.24%, outperforming the broader S&P/ASX 200 index. The monthly change through April showed a gain of more than 51%. Thursday’s 4.76% move added further to that run.
Zip Co Share Price Performance and Market Outlook
The company’s next earnings update is scheduled for August 2026. Until then, monthly trading data will remain the primary indicator investors use to track Zip’s progress against its FY26 targets. The April update confirmed the business remains on course.
Zip enters the final stretch of FY26 with its key metrics aligned to guidance. Credit quality is improving. US growth is holding above 40%. The ANZ segment continues to contribute steady revenue.
Whether Zip sustains this pace through the remainder of the financial year will determine how the market prices the stock into its August earnings release.
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FAQS
Q1. What caused Zip Co shares to rise on 7 May 2026?
A1. Zip Co shares rose 4.76% after the company released a strong April 2026 trading update showing more than 40% year-on-year US TTV growth and reaffirmed FY26 guidance.
Q2. What is Zip Co’s FY26 guidance?
A2. Zip expects group cash EBTDA of A$260 million, US TTV growth above 40%, an operating margin of 18%, and a revenue margin of 8% for FY26.
Q3. Why is the US market important for Zip Co?
A3. The US segment is Zip’s main growth driver, delivering strong transaction growth and customer expansion compared to the more mature ANZ market.
Q4. How did Zip Co perform in Q3 FY26?
A4. Zip reported record cash EBTDA of A$65.1 million in Q3 FY26, while total transaction volume increased 22.4% year on year to A$4.0 billion.
Q5. What are analysts saying about Zip Co shares?
A5. Most analysts maintain a bullish outlook on Zip Co shares, with an average price target of A$3.83 and the highest target at A$5.40.
Q6. How many customers does Zip have in Australia and New Zealand?
A6. Zip said its ANZ segment serves around 1.9 million customers, representing about 10% of Australia’s adult population.
Q7. When is Zip Co’s next earnings update?
A7. Zip Co is expected to release its next earnings update in August 2026.
Disclaimer
This article published by Colitco.com is for informational purposes only and does not constitute financial, investment, or trading advice. Readers should conduct independent research and consult a licensed financial adviser before making investment decisions regarding Zip Co Ltd (ASX: ZIP) or any other financial product. Market data, analyst targets, and company guidance may change without notice.
Sources
- https://data-api.marketindex.com.au/api/v1/announcements/XASX:ZIP
- https://www.asx.com.au/markets/company/ZIP
- https://www.raskmedia.com.au/2026/05/07/zip-asxzip-share-price-rises-on-strong-april-us-update/
