March has been a month to forget for Zip Co Ltd (ASX: Z1P) shareholders.
As we approach the final day of the month, the Zip share price is down 25% so far in March.
The buy now, pay later (BNPL) services provider kicked off the month at $2.07 per share and, at the time of writing, the Zip share price is currently up 0.65% at $1.55.
That's another painful month.
But with a new month ahead, could the Zip share price turn over a new leaf in April?
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Sezzle acquisition benefits questioned
As you're likely aware, on 28 February, Zip announced that it had entered into a definitive merger agreement with Sezzle Inc (ASX: SZL). Zip reported it will acquire Sezzle for a consideration of 0.98 Zip shares for every Sezzle share.
Sezzle has a substantial footprint in the huge BNPL market in the United States.
The Zip share price has fallen 25% since the merger was reported, while Sezzle shares have dropped 26%.
Which brings us back to the question, can Zip turn around in April?
For some insight into that, we turn to the team at Citi.
Citi analysts currently have a neutral rating on the company. However, Citi's target for the Zip share price is $2.15.
That's almost 36% higher than the current price.
Citi recently commented:
While we get the strategic merit in the Sezzle acquisition and see the cost synergies (opex and COGS) [operating expenses and cost of goods sold] as achievable, we do not think the acquisition changes Zip's competitive position in a meaningful way in the US and also see execution risks (e.g. churn) as part of the integration process.
The more immediate concern is higher than expected bad debt and slowing growth due to adjustments to risk settings and slowing e-commerce. However, with the balance sheet repaired we remain Neutral.
Zip share price snapshot
March wasn't the only month of hardship for Zip shareholders.
Over the past 12 months, the Zip share price has tumbled 78%. For some context, the S&P/ASX 200 Index (ASX: XJO) gained 11% over the full year.
