The Zip Co Ltd (ASX: Z1P) share price has continued its remarkable run and raced higher again on Monday.
At one stage the payments company's shares were up over 10% to an all-time high of $4.70. When its shares reached that level, it meant they had gained a whopping 330% since the start of the year.
Why did the Zip Co share price race higher today?
Whilst investors have been fighting to buy its shares all year due to the explosive growth it delivered in FY 2019, its latest gains appear to have been driven by the release of its annual report on Friday.
Although the annual report did not include anything deemed material, I feel it was a big reminder of the massive market opportunity that Zip Co and rival Afterpay Touch Group Ltd (ASX: APT) have.
Within the report the company included a section relating to its growth and outlook.
Management advised that it is confident in its ability to drive growth, achieve its targets, and expand the Zip Co business globally with a deliberate lift, shift and scale strategy.
In FY 2020 the company is targeting 2.5 million customers with an active Zip account and $2.2 billion in annualised transaction volume. This compares to 1.3 million customers and transaction volume of $1,128.5 million in FY 2019.
How will it get there?
Management advised: "With only 0.2% of the Australian retail market, we remain laser-focused on the Australian opportunity. We will continue to grow our network online and instore to accelerate acceptance and deepen customer engagement. Zip will look to increase its presence in travel, medical, telco and utilities to prove true credit card disruption. As well as growing its customer base, Zip will expand to SMEs offering instalments through Zip Biz."
And then there is the global opportunity, which I think has got many investors especially excited.
"Australia represents only 1% of the addressable global market. The global opportunity dwarfs the local region. BNPL is in its infancy in most territories with market share estimated at less than 1% in the US and UK. Many of Zip's partners have a global presence and desire a global solution. The recently announced PartPay acquisition gives Zip an immediate foothold into NZ, UK, US and South Africa," it added.
Overall, the global addressable market is worth a massive $22 trillion according to the report.
Should you invest?
Whilst Zip Co shares are certainly on the expensive side and better entry points could open up further down the line, I think if you're planning to make a long-term investment then now remains a good time to do it.
