The Zip Co Ltd (ASX: Z1P) share price has been a frustrating experience for many investors, trading sideways for the past six months.
Zip released an encouraging first-quarter update last week, citing a successful rebrand, continued international expansion, and a record performance across revenue and transaction metrics.
The quarterly announcement reads well at face value but struggled to reinvigorate the Zip share price.
Despite the lack of traction, the Australian Financial Review (AFR) reported a number of analysts that remain bullish on Zip's outlook.
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Why analysts are bullish about the Zip share price
Rebrand tailwinds
Zip collaborated with renowned international design agency, Koto, to replace its old colourful logo with a new one.
The company has described its new logo as "a bold purple, designed to stand out in the online and in-store checkout environments of Zip's merchants".
"The letter I in Zip is designed to flex and expand, forming a window in the heart of Zip's logo which allows it to showcase individual merchants and celebrate its customers and its people."
Logo aside, the company successfully changed its US business from Quadpay to Zip. A brand launch campaign is underway in the US from mid-October to drive brand awareness.
Analysts have pointed to the new brand as a "tailwind for customer numbers in the coming months", according to the AFR.
"The rebranding campaign is underway from mid-October, and we think Zip US should benefit in the second quarter… further supported by positive reopening trends in the US. The UK region, which had a slow start in the fourth quarter, has also seen good growth, in line with our expectations," said RBC Capital Markets analyst Chami Ratnapala.
Zip share price set to lead the ASX-listed BNPL sector
Square is expected to complete its acquisition of Afterpay Ltd (ASX: APT) in the first quarter of calendar year 2022, subject to certain closing conditions.
Square has agreed to establish a secondary listing on the ASX to allow investors to trade Square shares via CHESS Depositary Interests (CDIs).
A potential edge for the Zip share price would be its newfound position as the largest BNPL player on the ASX.
As the AFR put it, "investors wanting exposure to a purer buy now, pay later play will be drawn to Zip, which also has a more ambitious global plan compared to Square".
Cheap valuation
Shaw and Partners analyst Jonathon Higgins said he considers the Zip share price as "the cheapest and also the widest product platform globally", according to the AFR.
He said Zip shares have a more attractive valuation compared to the copmany's listed peers, including Afterpay.
