Highlights:

  • The EODHD/Others consensus broker rating for ZIP is BUY with a target price of AUD $3.79 — approximately 112% above the April 9 trading price of $1.790 — reflecting broker conviction that Zip's record 1H FY26 earnings, 18.7% operating margin, $50 million buyback, and US market leadership justify a substantially higher valuation than current market conditions have assigned.
  • ZIP shares fell 10.275% to $1.790 on April 9, 2026, with 39,896,002 shares traded and a market capitalisation of $2.53 billion — a significant reversal from the prior session's 17.365% surge to $1.960, with the broad market sell-off in technology and growth stocks appearing to pull back the stock from its recent highs despite no change in the company's fundamental position.
  • The pullback provides investors with a reference point against the company's strongest-ever half-year performance: record cash EBTDA of $124.3 million (up 85.6%), record TTV of $8.4 billion (up 34.1%), an 18.7% operating margin (vs 13.0% prior year), and upgraded full-year FY26 guidance — metrics that underpin the broker BUY thesis and $3.79 consensus target.

 

The EODHD/Others consensus broker rating for Zip Co (ASX:BUY) is BUY, with a consensus target price of AUD $3.79. This target implies approximately 112% upside from the April 9 trading price of $1.790 — a gap that reflects the disconnect between what brokers view as the intrinsic value of Zip's maturing BNPL platform and the share price that the market has assigned during a period of broader growth stock de-rating and sector-wide volatility. The BUY rating represents a clear majority view among the broker community that Zip's current price materially undervalues its earnings trajectory and capital management profile.

The broker bull case for Zip rests on several interconnected pillars. First, the company has demonstrated that it can generate substantial and growing profitability at scale — a long-awaited milestone for a BNPL operator that was for years associated primarily with growth metrics rather than earnings. The 85.6% increase in cash EBTDA to $124.3 million in 1H FY26 is the clearest expression of this transformation, and brokers who modelled a continued margin improvement trajectory have incorporated this into their target price models.

Second, the $50 million buyback program — announced on 20 February 2026 — signals management's own assessment that the stock is undervalued at current levels. When a company's Board and management team commit $50 million to purchasing shares on-market, they are effectively endorsing the view that the current share price is below the intrinsic value they can calculate from their inside knowledge of the business. This alignment of management conviction with the broker BUY consensus provides additional support for the long-side thesis at current price levels.

Third, the US market's growing contribution — now 75% of TTV — positions Zip as a meaningful player in the world's largest consumer credit market. The TAM (total addressable market) available to Zip in the United States dwarfs what is available in Australia alone, and brokers who assign value to the US growth runway embed this optionality into their target price models at levels that a current-year-earnings multiple alone would not capture.

April 9 Session: A Sharp Reversal From Record Highs

The April 9 decline of 10.275% to $1.790 represents a sharp and rapid reversal from the extraordinary 17.365% gain posted on April 8, when ZIP shares surged to $1.960 on the back of continued positive sentiment from the 1H FY26 results and buyback announcement. The two-day sequence — record gain followed by significant sell-off — illustrates the volatility that can characterise mid-cap growth stocks when macro conditions shift, and the extent to which short-term price discovery in ZIP is influenced by broader technology sector and global risk sentiment rather than purely by company fundamentals.

Volume of 39,896,002 shares on April 9 was extraordinarily high — comparable to the 41,532,558 shares traded during the April 8 surge — indicating that the selling pressure on April 9 was as intense as the buying pressure had been the previous day. This high-volume reversal pattern is typical of stocks that have experienced a rapid re-rating event: after the initial rush of buyers drives a large single-day gain, some proportion of those buyers take profits rapidly, particularly if broader market conditions deteriorate on the following session. The broad market was barely changed on April 9 (ASX 200 -0.11%), but global technology sector sentiment appeared to weigh on growth stocks including ZIP.

At $1.790, ZIP still trades materially above the levels that prevailed before the 1H FY26 results and buyback announcement, suggesting that a portion of the fundamental re-rating has been retained. The net change over the two-day period — from pre-announcement levels to $1.790 — likely reflects a more accurate incorporation of the company's improved earnings trajectory than either the extreme of the April 8 peak or the prior pre-announcement level.

1H FY26 Results: The Earnings Inflection That Drives the BUY Rating

The 1H FY26 results released on 19 February 2026 represent the most important data point in the current Zip investment thesis. Record cash EBTDA of $124.3 million — up 85.6% year-on-year — confirmed the earnings inflection that brokers had been anticipating as the company's margin improvement program delivered results at scale. The 18.7% operating margin, compared to 13.0% in 1H FY25, represents a 570 basis point improvement that demonstrates the operating leverage available in the BNPL platform model as transaction volumes grow faster than the cost base.

Total transaction volume of $8.4 billion — up 34.1% — was the volume foundation that enabled the earnings growth, while the stable cash net transaction margin of 3.8% confirmed that the volume increase was not purchased through deteriorating credit quality or merchant economics. Total income of $664.0 million (up 29.2%) provided strong topline momentum, and cash gross profit of $314.3 million (up 33.5%) demonstrated that the company is capturing a growing absolute margin pool as TTV scales.

Active customers of 6.6 million (up 4.1%) and merchants of 90,600 (up 10.5%) confirm ongoing growth in the two-sided platform, while transactions of 54.9 million (up 20.2%) growing faster than active customers implies higher average transaction frequency per customer — a positive indicator of platform stickiness and growing share of customer spending. Net bad debts of 1.7% of TTV, marginally above the 1.6% in 1H FY25 but characterised by management as within targets, confirm that credit quality is being managed within acceptable parameters as the platform scales.

The $50 Million Buyback: Capital Discipline in Action

The on-market share buyback of up to $50 million announced on 20 February 2026 was a qualitatively important signal that accompanied the strong earnings results. For a company that has historically been characterised by capital consumption as it invested in growth, the announcement of a buyback program marked a definitive transition to a phase in which the business generates more capital than it needs to invest and can return surplus capital to shareholders.

The buyback program commenced on or about 6 March 2026 and runs for up to 12 months. Under ASX Listing Rules, shares will be purchased at no more than 5% above the five-day VWAP, and the total cannot exceed 10% of issued capital over the 12-month period. With the share price having declined substantially from the April 8 peak, the buyback program — if still active — provides a systematic source of buying support that can help establish a floor under the share price during periods of selling pressure.

From a capital allocation perspective, a buyback at the current price of $1.790 — when the management team believes the intrinsic value is substantially higher, as implied by their announcement of the buyback when the stock was at similar levels — represents a highly accretive use of capital. Each share purchased at $1.790 with a management view of intrinsic value materially above this level creates immediate per-share value for remaining shareholders.

US Market Leadership: The Scale Prize Brokers Are Pricing

The US market's 75% share of Zip's total transaction volume is the most important single statistic in the company's medium-term growth narrative. The United States is the world's largest consumer credit market, and BNPL penetration as a percentage of total retail transactions remains well below theoretical saturation levels. For Zip to have established a position of this scale in the US — with $6.3 billion of annualised TTV attributable to American transactions — is a significant commercial achievement that required years of investment in merchant relationships, technology infrastructure, and credit risk management capability.

The slight compression in revenue margin from 8.2% to 7.9% that accompanied the higher US weighting reflects the structural reality that US BNPL pricing is more competitive than in Zip's Australian market of origin. US merchants operate with lower payment processing cost tolerance and higher willingness to negotiate, meaning that the revenue per transaction dollar is typically lower in the US than in Australia. Brokers who model Zip's revenue margin at the group level incorporate this structural dynamic and project gradual improvement as the US business matures and the mix of higher-margin merchant categories grows over time.

The 3Q FY26 results, scheduled for release on 17 April 2026, will be the next major quantified update on the US business trajectory and the overall momentum of the platform through the December-March quarter. Given the strong 1H FY26 result and upgraded full-year guidance, investors will be looking for confirmation that the volume growth, margin retention, and credit quality metrics have continued at or near 1H FY26 levels.

Upcoming Catalysts and the Path to the Broker Target

The path from the current price of $1.790 toward the $3.79 broker target price runs through a sequence of earnings confirmation events and capital management execution that together build the cumulative evidence base for the re-rating. The 3Q FY26 results on 17 April 2026 are the immediate near-term catalyst, followed by the full FY26 results (including Appendix 4E and full financial report) on 20 August 2026. These two events will provide the quantified evidence for whether the 1H FY26 momentum has been sustained and whether the upgraded full-year guidance will be met or exceeded.

The ongoing execution of the $50 million buyback will also be a factor — each quarter of active buyback purchasing at below-intrinsic-value prices creates accretion for remaining shareholders. The pace of buyback activity, disclosed in quarterly market updates, provides investors with regular evidence of management's price conviction at current levels. A consistent buyback pace in the $1.70–$2.00 range would reinforce the message that management views these prices as compelling buying opportunities.

Conclusion

Zip Co's April 9 decline to $1.790 — after the previous day's record surge — placed the stock at approximately 53% of the EODHD/Others consensus broker target price of $3.79 and reinforced the BUY rating's implicit message that a significant re-rating remains available for patient investors. The fundamental backdrop is unchanged: record 1H FY26 cash EBTDA of $124.3 million, an 18.7% operating margin, $8.4 billion in TTV, US market leadership, and a $50 million buyback collectively represent the strongest financial performance in Zip's listed history. The gap between the company's demonstrable earnings quality and its current market valuation is the central tension that the broker BUY consensus reflects — and which the 3Q FY26 results on 17 April and the full-year results on 20 August will either resolve or extend.