The Zip Co Ltd (ASX: ZIP) share price has had an incredible year, approximately doubling over that time period, as the chart below shows. But, after such a strong return, investors may be wondering what happens next.
After another impressive financial year in FY25, could the next 12 months be anywhere near as good?
The buy now, pay later business has certainly regained a lot of investor confidence and its finances continue to climb. In this article, we're going to explore what a $5,000 investment in Zip shares could become. Before we get to that, I want to acknowledge how strongly Zip has performed recently.
The 2025 financial year saw the business report total transaction value (TTV) increase by 30.3% to $13.1 billion, helping total income grow by 23.5% to $1.08 billion.
Perhaps even more importantly, the company saw its profitability metrics improve in several ways.
The net bad debt as a percentage of TTV improved to 1.5%, down from 1.7% in FY24. Cash operating profit (EBTDA) surged 147% to $170.3 million and the operating margin (cash EBTDA divided by the total income) increased to 15.8%, up from 7.9% in FY24. The cash gross profit increased 34% to $509 million and the cash net transaction margin increased to 3.9%, up from 3.8%.
After such strong progress made by the business, let's take a look at where experts think it will be trading in a year from now.
Image source: Getty Images
Expert view on the Zip share price
The broker UBS said that when looking at FY26, management's operating margin guidance of between 16% to 19%, up from 15.8% in FY25, implied a 6% upgrade (at the mid-point of the guidance) to what analysts were expecting.
UBS thinks the rising profit margins demonstrate management's "continued focus on operating leverage". The broker is "positive on margin outlook, and views guidance as relatively conservative given the operating leverage in the business while the US is growing so strongly at low loss rates."
The broker currently has a buy rating on Zip shares and a price target of $4.50. A price target is where experts think the share price will be trading in 12 months. However, due to the recent strength of the Zip share price, that price target of $4.50 implies little movement over the next year, at the time of writing. Therefore, $5,000 may still be worth roughly $5,000 in a year.
Even so, UBS is predicting that Zip could generate net profit after tax (NPAT) of $69 million in FY26 and this could climb to $297 million by FY29.
