The Z1P Co Ltd (ASX: Z1P) share price is 15 cents or 6% higher this morning after the buy-now-pay-later star reported record quarterly revenue of $23 million for the quarter ending March 31 2019, which is up 20% on the prior quarter. It also reported it has a total of 14,363 retailers signed up which is up 13% on the prior quarter and 60% on the prior corresponding quarter.
Both the group’s cash operating costs as a percentage of sales, and cash cost of sales as a percentage of receivables, also reduced by 50 basis points and 10 basis points respectively, in a sign that its underlying operating metrics are tracking in the right direction if somewhat slowly.
A slight disappointment is that total transaction volume fell 8% over the quarter, compared to the prior quarter with total transactions also flat, although it must be remembered that the Christmas quarter is when a lot of consumers do most of their shopping.
Z1p also raised $56 million over the quarter as it needs to invest as it’s obviously in a land grab race for market share with competitor, first mover, and market leader AfterPay Touch Group Ltd (ASX: APT).
However, it’s worth noting that Zip’s market cap still sits well below $1 billion, compared to AfterPay’s $5.6 billion valuation largely thanks to investors anticipating AfterPay shooting the lights out in the U.S. market.
While another buy-now-pay-later start-up in Splitit Ltd (ASX: SPT) today reported that it had signed up just 57 retailers over the 3 months to March 31 2019, but that’s not stopped ‘traders’ sending the shares up 24% today.
On my maths at its current retailer sign up rate it would take Splitit around 111 years just to get where AfterPay is today. I’m all for investing for the long-term, but Splitit shareholders might to find the Holy Grail Cup of eternal life unless the company ramps up its performance in the short term.
While bargain hunters might want to do some more research into Z1P Co given it’s still growing at healthy double-digit rates.
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The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.