One of the best performers on the local market on Friday has been the Zip Co Ltd (ASX: Z1P) share price.
In afternoon trade the buy now, pay later company's shares are up 11% to $2.39. At one stage today the shares of the Afterpay Touch Group Ltd (ASX: APT) rival were up 12% and hit an all-time high of $2.41.
Why is the Zip Co share price going nuts?
With no news out of the company or broker notes that I'm aware of, today's stellar share price gain is a bit of a mystery.
However, investors have been fighting to get hold of the company's shares all year, so today's impressive gain is certainly nothing new.
In fact, when its shares hit the all-time high of $2.41, it meant they had gained an incredible 119% since the turn of the year.
An impressive first half result and the favourable conclusion of the Senate inquiry into credit and financial services targeted at Australians at risk of financial hardship have largely been the drivers of this gain.
In the first half of FY 2019 Zip Co posted revenue of $34.2 million, up 114% on the prior corresponding period. This was driven by a 110% increase in transaction volume to $495.2 million and a 54% lift in its loan book to $489 million.
In addition to this, the company reported that it had over 1 million customers and over 12,500 merchants on its platform. New merchants on its increasingly popular platform included Super Retail Group Ltd (ASX: SUL) and Wesfarmers Ltd (ASX: WES) home improvement subsidiary Bunnings.
And despite the significant increase in its customer numbers, Zip Co's net bad debts fell from 2.61% to 1.81% thanks to "its marketing-leading decision technology."
Should you invest?
I'm a big fan of Zip Co and believe it has strong growth potential that could make it a great long-term investment.
However, its shares are looking a little expensive now, so it may be worth holding out for a better entry point.
