Business · Markets · 1 hr ago
Zip shares fall more than 50% as UBS sees room to rise
Zip Co is an Australian buy now, pay later company whose shares have fallen more than 50% over the past year.
UBS rates the shares a buy and set a price target of $4.40, compared with a recent price of $2.24.
Zip reported income of $1.35 billion for FY26, up 24.6%, and record cash earnings of $268.9 million, up 57.9%.
Its total transaction volume rose 27.2% to $16.7 billion, with US volume up 42.5%.
The company said it expects cash earnings of $340 million in FY27, while UBS sees spending on essentials such as health, education, cars and transport as a strength.
Risks include rising bad debts and possible interest rate increases in Australia and the US.
UBS expects only a small reduction in its earnings outlook, but its share price target is an estimate, not a guarantee.
Zip shares have fallen more than 50% over the past year, while UBS has a buy rating and a $4.40 price target.
Zip reported FY26 total income of $1.35 billion, up 24.6% on FY25, and record cash earnings of $268.9 million.
Its total transaction volume rose 27.2% to $16.7 billion, with US volume growing 42.5%.
Zip said it was targeting cash earnings of $340 million in FY27, a 26% increase.
UBS said the company’s exposure to non-discretionary US spending helped offset macroeconomic concerns.
- Who
- Zip Co Ltd and UBS.
- What
- Zip shares have fallen more than 50% over the past year; UBS rates them a buy and has a $4.40 price target.
- When
- The article was published on 12 October 2026; Zip reported its results in mid-August.
- Where
- Zip operates in the US and ANZ markets.
- Why
- UBS sees potential for growth, citing Zip’s exposure to non-discretionary US spending and its growth outlook.
This story does not have two clearly opposing sides.
Consistent execution has built the platform to deliver our next phase of growth and innovation.
Whilst we are watching macro risk, we see these concerns overplayed given Zip's exposure to non-discretionary spend in the US, and slowing macro potentially catalysing growth in the buy now pay later space as consumers consider non-traditional cash flow management tools over traditional credit.
Zip shares fell more than 50%.
Zip reported FY26 total income of $1.35 billion and record cash earnings of $268.9 million.
Motley Fool AU published its article on Zip shares and UBS’s outlook.
- Share-price fall
- More than 50% over the past year
- UBS rating
- Buy
- UBS price target
- $4.40
- FY26 total income
- $1.35 billion, up 24.6% on FY25
- FY26 cash earnings
- $268.9 million, up 57.9%
- FY27 cash earnings target
- $340 million, a 26% increase
Sources
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