It has been another stunning day of trade for the Zip Co Ltd (ASX: Z1P) share price.
At one stage this morning the payments company's shares rose a massive 11% to an all-time high of $3.20.
Its shares have since given back some of these gains, but still sit 7% higher at $3.09 at the time of writing.
This latest gain means that the Zip Co share price has now risen a staggering 183% since the turn of the year.
Why is the Zip Co share price rocketing higher?
Investors have been fighting to get hold of the company's shares this week after it released another impressive quarterly update.
That update revealed that Zip Co achieved a 20% quarter on quarter increase in revenue to a record $23 million during the third quarter.
A key driver of this top line growth was the 143,000 or 14% increase in customer numbers since the end of the second quarter to 1.2 million. Supporting this was the addition of several key retailers to its platform. New retailers on the Zip Co platform include Chemist Warehouse, General Pants, and Lorna Jane.
Another big positive in my opinion was that Zip Co continued to see a reduction in its net bad debts. They reduced to 1.75% from 1.81% in the previous quarter thanks to the company's market-leading credit performance.
One broker that liked what it saw was Morgans. According to a note out of the broker this morning, its analysts have retained their add rating and lifted the price target on its shares by almost 69% to $3.19.
Morgans appears to have been impressed with Zip Co's third quarter and notes that it shows further proof of its improving operating leverage.
Should you invest?
Whilst I think the shares of both Zip Co and Afterpay Touch Group Ltd (ASX: APT) are trading at about fair value now, I would still be a buyer if you were prepared to hold them for the long term.
I would suggest investors choose them both ahead of upcoming rival Splitit Ltd (ASX: SPT), which I feel still has a lot to prove before it can be classed as investment grade.
