It hasn't been a great week so far for the Zip (ASX:Z1P) share price

Shares in the buy now, pay later group are falling lower this week

The Zip Co Ltd (ASX: Z1P) share price has been under pressure this week. Shares in the buy now, pay later (BNPL) leader are down 2.4% from Monday's opening price of $7.04 per share.

Here's what's affecting the Aussie payments company's value in recent days.

illustration of laptop with down arrow and the word zip representing zip share price going down.

Image source: Getty Images

It's been a tough week for the Zip share price

Whenever an ASX share slides lower, it's always worth checking for any new announcements to contextualise the move. Unfortunately for curious investors, the last announcement from Zip was the company's full-year results release last Wednesday.

Zip reported a 293% surge in transaction numbers to 41.3 million in FY21. Total transaction value (TTV) jumped 176% to $5.8 billion as customer numbers jumped 248% to 7.3 million.

Those all look like solid growth numbers on the surface. However, investors didn't appear thrilled with the latest update with the Zip share price slipping following the release of the results.

That came after Zip noted a 30 basis point (bps) decline in cash transaction margin to 3.5%. Zip's marketing costs also surged 650% during the year as the company chases more market share in the growing sector.

The Zip share price has been sliding lower since last Wednesday's result. The valuation slide comes as shares in rival Afterpay Ltd (ASX: APT) have climbed 2.6% higher in the last 5 days.

There's also been increasing competition in the BNPL landscape. In a space that was ruled by Zip and Afterpay, new entrants such as PayPal Holdings Inc (NASDAQ: PYPL) and Commonwealth Bank of Australia (ASX: CBA) are now snapping at Zip's heels.

Foolish takeaway

The Zip share price has been under pressure in recent days in what appears to be a hangover from the BNPL group's FY21 results.

It's not all doom and gloom, however, with shares in the ASX company still up 22.9% year to date.

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, PayPal Holdings, and ZIPCOLTD FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended PayPal Holdings. 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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