After posting a small gain yesterday, the Zip Co Ltd (ASX: Z1P) share price is back in negative territory.
This follows eight consecutive market days in the red from 5 April to 14 April, shedding around 21%.
At the time of writing, the buy now, pay later (BNPL) company's shares are trading at $1.22, down 2.8%.
Below, we look at what could be weighing down the company's share price.
What's going on with the Zip share price?
Zip shares have been in the spotlight in recent times as pressure continues to mount on the BNPL market.
Despite the company recording impressive figures across its global operations, investors have focused on its bottom line.
In its half-year results, Zip registered a loss of $153.6 million compared to the $139.8 million in H1 FY21.
The company acknowledged a shift in the external environment, arguably quicker and more severe than first forecasted. In response, management refined its strategy but it is still too early to tell if this will pay off.
Not helping matters is the fall of the S&P/ASX All Technology Index (ASX: XTX), which has sunk 17% year to date.
However, today's delisting of BNPL rival Zebit Inc (ASX: ZBT) could be the reason why investors are offloading Zip shares.
With Zebit falling victim to the overcrowded BNPL market on the ASX, it appears investors may be concerned about Zip.
Recently, the Reserve Bank of Australia signalled two rate hikes this year to slow down the rising price of goods.
What this means is that consumers are less likely to spend on discretionary items when interest rates are picking up.
The cost of debt – such as credit cards and personal loans – will require extra payments, affecting consumer spending habits.
What are the brokers saying?
After reporting its financial scorecard, a couple of brokers rated the company with varying price points.
Analysts at UBS downgraded Zip shares to a sell rating, and cut its 12-month price target by a massive 81% to $1. Based on the broker's assessment, this implies a downside of around 20%.
Following suit, the team at Ord Minnett also reduced its stance on Zip shares by 33%, but with a price target of $4. Regardless of the diminished outlook, this implies a potential upside of 220% from where it trades today.
About the Zip share price
Over the past 12 months, the Zip share price is down 86%. Year to date Zip shares are down more than 70%.
It's worth noting that the company's shares reached an all-time high of $14.53 in mid-February 2021, before plummeting to multi-year low levels.
Based on the current Zip share price, the company has a market capitalisation of $856.57 million.
