The last two months have been a great time to have been invested in ASX shares. As we covered here on the Fool earlier today, the ASX 200 enjoyed a healthy gain of 2.04% over the month of August and a gain of around 1.1% in July before that.
But one ASX 200 share hasn't been joining in the celebrations. That would be the buy now, pay later (BNPL) company Zip Co Ltd (ASX: Z1P).
The Zip Co share price has not had a good month, or a good two months to be precise. Since hitting $8.78 a share back on 7 July, it has been a slow but steady decline for Zip shares ever since. Today, Zip is trading at $6.89 a share at the time of writing. That's up 0.88% for today, but is also a good 21% down from where Zip was at on 7 July.
So what's gone wrong for Zip over the past two months?
Well, for one, Zip's FY21 earnings report, which the company released a week ago, didn't exactly impress investors. Although Zip reported some arguably strong numbers, including a revenue jump of 150% to $403.2 million and a 247.5% increase in active customers, investors seem to have been expecting a bit more. On the day the report came out, the Zip share price fell 2.6%. And it continued falling for most of last week.
Another factor that might have been an anchor on Zip shares was the blockbuster acquisition of Zip's BNPL arch-rival Afterpay Ltd (ASX: APT) by the US payments giant Square Inc (NYSE: SQ).
Now Zip shares actually spiked by almost 10% when this news became public on 2 August. This was presumably due to increased hype over BNPL shares in general, as well as potential hopes that Zip itself would find a rose-laden suitor on its own doorstep. But this optimism seems to have faded in the weeks since.
What's next for the Zip share price?
So what's next for Zip shares? Well, as my Fool colleague James covered yesterday, broker Morgans thinks the current pricing might be a buying opportunity for Zip shares. Morgans reportedly has an 'add' rating on Zip shares, with a newly revised 12 month share price target of $8.87.
That implies a potential upside of almost 28% going forward. Morgans sees "longer term upside if Z1P can execute on its ambitions of becoming a global payments player".
At the current Zip Co share price, the BNPL company has a market capitalisation of $3.9 billion.
