The Zip Co Ltd (ASX: ZIP) share price is down 1% so far in May.
Which also happens to be how much the ASX buy now, pay later (BNPL) stock is down in intraday trading today.
With the Zip share price having dropped 9% in April, stockholders will certainly be hoping for a better result in May.
So, what can investors expect?
What's the outlook for the ASX BNPL share in May?
While short sellers tend to get it wrong as often as they get it right, the consistently high levels of short interest in Zip's stock isn't a strong endorsement for the outlook of the Zip share price.
In yesterday's trading, short interest stood at 10.9%.
Short interest aside, on the plus side for the Zip share price in May, the company has already suffered through a 0.25% interest rate increase from the RBA and a matching increase from the US Federal Reserve this month.
With no more rate hikes on the cards in May, investors can at least breathe a sigh of relief on that front.
Zip also reported some strong quarterly results towards the end of April, which may help support the stock in the weeks ahead. Highlights included a 15% year-on-year increase in revenue, which reached $182 million.
And Zip could get some support in May from the company's positive guidance. Management reported they have sufficient available cash and liquidity to get the stock back into profitability in the first half of the 2024 financial year.
Still, the Zip share price might well face more downside in May.
Potential headwinds could come amid any reports of further slowdowns in the Aussie or global economies, which could impact the company's revenues.
And consumers stressed by high inflation and rocketing interest rates could drive further increases in credit losses for the ASX BNPL stock.
Then there's the ongoing debate over new regulations for the industry. If the government comes out in May supporting the stricter options, which would see BNPL companies subject to similar regulations as credit card companies, that could see investors hitting the sell button.
Zip share price snapshot
It's been a rough 12 months for the Zip share price, down 50% since this time last year.
So far in 2023, the ASX BNPL stock is down 10%.
