Is the Zip (ASX:Z1P) share price in the buy zone?

The Zip Co Ltd (ASX:Z1P) share price is pushing higher on Monday. Can the BNPL provider's shares keep on climbing higher from here?

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The Zip Co Ltd (ASX: Z1P) share price has had a reasonably positive start to the week.

After being up as much as 5% at one stage, the buy now pay later (BNPL) provider's shares are up 1% to $7.09 late in the session.

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Image source: Getty Images

Why is the Zip share price rising today?

The Zip share price was given a boost today by news that the company is expanding into the European and Middle East markets. The company will be doing this in the same way it entered the United States market, by acquiring an established player in both markets.

In Europe, Zip is acquiring the shares it doesn't already own in Twisto Payments for 89 million euros (~A$140 million). Whereas in the Middle East, the company is acquiring the shares it doesn't already own in UAE-based Spotii for US$16 million (~A$21 million).

Management commented: "Zip has adopted a similar approach to Quadpay, which proved to be highly successful. By initially making low-risk minority investments, Zip is well placed to validate cultural fit and management alignment, stress test the business plan and identify synergies, and plan for integration."

It also notes that Europe is a $1.1 trillion annual ecommerce market and Twisto's license can be passported to all 27 member states of the European Union. And while the Middle East market is much smaller, it is growing fast.

The acquisition of Spotii is expected to complete in the third quarter of calendar year 2021, whereas the Twisto acquisition is expected to complete in the fourth quarter.

Judging by the performance of the Zip share price, investors appear happy with the news.

Should you invest?

While brokers have yet to run the ruler over this news, one broker that was already particularly bullish on the Zip share price is Citi.

Its analysts recently upgraded Zip's shares to a buy rating with an $11.30 price target.

In addition to this, fellow broker Morgans currently has an add rating and $10.39 price target on the company's shares.

Based on the middle of these price targets ($10.85), this implies potential upside of over 50% from where the Zip share price trades today.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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