Investors in Zip Co Ltd (ASX: Z1P) shares have an anxious wait on their hands. Zip reports its earnings for the 2021 financial year tomorrow, and all eyes are on this buy now, pay later (BNPL) company in anticipation of what its books might hold.
While we wait, it might be a good idea to check out how the Zip share price responded to the company's last earnings report. That was back on 25 February, when the company delivered its half-year update for FY21. Let's see what happened with Zip shares when that all went down.
Back in February, Zip reported its numbers for the half-year ending 31 December 2020. Here's a summary of what Zip had to show for itself:
- Revenues of $160 million, up 130% year-on-year
- Total transaction volume of $2.32 billion, up 141% year on year
- A loss before tax, depreciation, amortisation, and share-based payments of $14.9 million
- Statutory loss of $455.9 million
- Cash gross profit margin of 54%
- 5.7 million active customers, a 217% year-on-year increase
- US-based QuadPay acquisition implemented
How did the Zip share price react at the time?
The market reaction to this earnings report was swift.
Investors gave Zip two thumbs down following the release of these results. As we covered at the time, the Zip share price fell around 10% upon release of these earnings. A month later, the company had shed around a third of its value. It was trading around $11.86 a share the day before this report was released. By 25 March, Zip shares had fallen to $7.53.
Of course, the Zip share price arguably got caught up in some frenzied speculation in the month or so leading up to this earnings report.
Between 15 January and 16 February, Zip had rocketed from around $5.60 a share all the way to a high of $14.53 a share. The ride up proved to be just as steep as the ride down for investors over this period.
We see no similar build-up to Zip's earnings this time around, so who knows what might happen after tomorrow.
Zip is trading at a share price of $7.26 a share at the time of writing, up 1.68% today. That gives Zip Co a market capitalisation of $4.01 billion.
