Why is the Zip share price the best-performing ASX 300 stock so far this year?

The best-performing ASX 300 stock of 2024 so far is an unlikely hero.

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The best-performing stock on the S&P/ASX 300 Index (ASX: XKO) over 2024 to date might surprise you. By the headline, you probably already know the answer, but just for the record, it is none other than buy now, pay later (BNPL) share Zip Co Ltd (ASX: ZIP).

This might come as a surprise to some investors because it wasn't too long ago that Zip shares were something of a pariah on the ASX. Remember, this is a company that fell from over $14.50 a share in early 2021 to just 26 cents a share by October last year. That's a wealth-destroying drop of 98.2%.

Yet investors who have bravely held on during this rollercoaster ride (or been better, bought in October) have enjoyed something of a reprieve in recent months.

Between 6 October and 31 December, Zip shares hopped on a rocket ship, gaining a whopping 146%. Since the beginning of 2024, we've seen another 120.97% added to the Zip share price.

That stonking gain is enough to crown Zip the best-performing ASX 300 share of the year so far.

What's gone so right for Zip shares in 2024?

Well, Zip's most recent success seems to be a result of two events in particular.

Firstly, Zip delivered a fairly impressive quarterly update back in January. The BNPL stock told investors that its transaction volumes rose 8.5% over the second quarter of FY2024. Revenues also rose by an even more luminous 26.1% to $225.6 million for the quarter.

Zip backed this up with its half-year earnings results in February too. The company reported a 28.9% rise in revenues for the six months to 31 December, as well as a cash gross profit of $176.2 million, which was up 45.9%.

Secondly, Zip's January quarterly update prompted some rumours over February that Zip might be becoming an appealing target for a takeover. As we covered at the time, "'multiple sources' have suggested at least one possible suitor is eyeing up Zip, and it is 'gaining interest'".

We haven't heard any more developments on that front, but this did give Zip shares a meaningful boost, and we are still seeing the momentum from this in the company's stock price today.

So a wonderful start to 2024 for Zip shares. Let's see what this BNPL share does over the rest of 2024.

Motley Fool contributor Sebastian Bowen 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 Zip Co. 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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