The Zip Co Ltd (ASX: ZIP) share price continued its ascent in November and delivered market-beating returns again for shareholders.
During the course of the month, the buy now pay later (BNPL) provider's shares rose a further 13%.
As a comparison, the ASX 200 index rose a solid 3.4% over the period.
This means that its shares are now up a staggering 450% since the start of the year.
To put that into context, a $1,000 investment at the end of last year would now be worth approximately $5,500.
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Why did the Zip share price race higher in November?
There were a few catalysts for this strong gain last month.
One was the release of its first quarter update at the end of the previous month. This gave investor sentiment a big boost and the effects were felt throughout November.
Particularly after brokers responded very positively to the update. More on that in a minute. For now, let's look back at what Zip reported.
For the three months ended 30 September, Zip posted group cash EBTDA of $31.7 million. This is up 233.7% over the prior corresponding period and is almost half the $69 million group cash EBTDA it recorded in the whole of FY 2024.
This strong earnings growth was driven largely by an impressive performance from the US business. Management noted that Zip US delivered total transaction volume (TTV) of US$1,301.8 million for the period, which is up 42.8% year on year. This led to US revenue increasing 43.9% to US$92.1 million.
Commenting on the quarter, Zip's CEO and managing director, Cynthia Scott, said:
Our US business continued to deliver outstanding growth, with TTV up 42.8% and revenue up 43.9%, versus 1Q24, driven by ongoing engagement in higher-margin channels such as the App.
What else?
As mentioned above, this strong quarterly update went down well with analysts.
For example, UBS responded to the update by reaffirming its buy rating and lifting its price target by 49% from $2.45 all the way up to $3.65.
Even after last month's heroics this still implies potential upside of approximately 7% for the Zip share price. So, its gains may not be over just yet.
Elsewhere, Ord Minnett was impressed with the company's performance and responded by retaining its buy rating and increasing its price target to $3.60.
In addition, Zip held its annual general meeting last month. While nothing overly material was included in its presentation, management spoke very positively about the future.
All in all, things are certainly looking up for this stock right now.
