Zip Co Ltd (ASX: ZIP) shares have been popular with investors over the past 12 months.
During this time, the buy now pay later (BNPL) provider's shares have regularly featured on the most traded lists.
But have they been a good choice? Let's see what a $10,000 investment back in 2023 would have turned into today.
$10,000 invested in Zip shares
This time last year, things were looking reasonably mixed for the BNPL company.
It had not long since released its full year results for FY 2023 where it had reported a cash EBTDA loss of $48.2 million.
And with inflation out of control, interest rates being taken higher, and the cost of living crisis hitting spending, the market had concerns about how Zip would fare.
In light of this, Zip's shares were trading at a lowly 28 cents.
This means that if you had bravely invested $10,000 into Zip's shares you would have ended up owning 35,714 units.
What are they worth today?
Over the past 12 months, Zip has demonstrated the resilience of its business model and delivered very strong profitable growth.
For example, last month, the company released its full year results and reported a 28.2% increase in revenue to $868 million and positive cash EBTDA of $69 million.
And despite the tough economic environment, all of Zip's operating metrics headed in the right direction. This includes net bad debts falling 18 basis points to 1.7% and its revenue margin jumping 96 basis points to 8.7%.
Commenting on the result, Zip's CEO and managing director, Cynthia Scott said:
This has been an outstanding year for Zip, with the Company executing against all of its strategic priorities and reinforcing its position as a strong, simplified and profitable business.
The market certainly agreed. On Friday, Zip's shares ended the session at $2.79. This means that those 35,714 units would now have a market value of $99,642.06.
That's a staggering return of almost $90,000 on a $10,000 investment in just 12 months! In this instance, it certainly paid to be brave.
Where next for Zip shares?
Unfortunately, the major brokers believe that Zip's shares have now peaked for the time being.
For example, UBS and Ord Minnett currently have buy ratings and $2.45 price targets on them. This is approximately 12% below where they trade today.
Though, a strong first quarter update next month could change those valuations. So, the gains may not be over just yet.
