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Boom! Why has the Zip share price soared 31% in a week?

The ASX BNPL share is again on the rise today. What's going on?

Posted by
Monica O'Shea
Monica is a journalist with experience working for Daily Mail Australia in Sydney and the Port Pirie Recorder and the Flinders News in South Australia. Monica completed a journalism cadetship in 2013. She also hold a B.Science (Biotechnology) with Honours from the University of Adelaide. Monica has worked in government at the local, state and federal level. Monica has a keen interest in finance and the share market and enjoys exploring the highs and lows. When not writing for Motley Fool Australia, Monica enjoys travel, sport, music, and likes to play the violin in her spare time.
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Key points
  • Zip shares have soared 31% in a week 
  • The BNPL share could be lifting today amid strong retail sales data from the USA 
  • Zip's founder and CEO Larry Diamond recently moved to the US given the "significant" opportunity for the company over there 

The Zip Co Ltd (ASX: ZIP) share price has had a top run in the past week.

Zip shares have surged 31% since market close on 10 November to the current price of 82 cents per share. For perspective, the S&P/ASX 200 Index (ASX: XJO) has climbed 2.6% in the same time frame.

So what is going on with this ASX buy now, pay later (BNPL) share?

A happy shopper with a wide mouthed smile holds multiple shopping bags up around her shoulders.

Image source: Getty Images

What's happening with Zip?

Zip shares soared 18% on 11 November alone. Investors bought up Zip shares amid general sector strength.

This followed an incredible night on US markets, where the S&P 500 Index (SP: .INX) lifted 4.7% and the NASDAQ-100 (NASDAQ: NDX) soared 7.5% on better-than-expected inflation data.

Zip shares surged 12% on Wednesday and are currently up a further 4.5% today.

A positive business update from fellow BNPL share Sezzle Inc (ASX: SZL) may have boosted investor sentiment in the Zip share price on Wednesday. Sezzle reported it is making significant progress towards profitability.

Zip's over-the-counter market listing in the US (OTCMKTS: ZIZTF) soared 17% to 55 US cents overnight.

US retail sales lifted more than expected in October, Reuters reported today. This could be providing Zip shareholders with confidence today, given Zip's BNPL solution can be used for in-store payments.

Zip CEO and co-founder Larry Diamond moved to the US last month to take advantage of "significant opportunity" for the company in America. Diamond said:

It is important to be there to demonstrate what we have done in Australia. There is still a significant opportunity for fintech in the US, as US banks are asleep at the wheel.

Diamond also said in October he believes Zip can be the next Commonwealth Bank of Australia (ASX: CBA). He said there is "no reason why deposits and mortgages can't be inside Zip, if customers trust us".

Zip share price snapshot

The Zip share price has descended 86% in the past year, while it has fallen 81% in the year to date.

In comparison, the ASX 200 has shed more than 3% in the past year.

Zip has a market capitalisation of around $554 million based on the current share price.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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