Why are Zip shares down 23% in a month, and what was revealed at the AGM today?

The buy now, pay later operator conducted its annual general meeting on Thursday.

| More on:
a young woman holds her hand to her ear and leans sideways as if to listen to something that's surprising her as her eyes and her mouth are wide open.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Zip shares are down 3.3% to $3.65 following the company's AGM, despite CEO Cynthia Scott's assurances of being on track to meet FY26 targets, emphasising profitability, strategic growth, and partnerships.
  • Zip's strategic shifts, such as scaling in the US and integrating with Xero in ANZ, contributed to record profitability and growth in FY25, yet no dividends are expected soon as the company focuses on reintegrating earnings into business development.
  • Zip shares have declined following the 1Q FY26 results on 20 October, but the stock has attracted a buy rating from Macquarie with a 12-month price target of $4.85.

Zip Co Ltd (ASX: ZIP) shares are down 3.3% to $3.65 following the company's annual general meeting (AGM) today.

The buy now, pay later (BNPL) stock has tumbled 23% over the past month, with several experts recommending we buy the dip.

Group CEO and managing director Cynthia Scott told investors today that Zip remains on track to achieve its upgraded FY26 guidance.

Zip share price falls despite CEO assurances

In a speech, Scott reiterated that the BNPL provider delivered record profitability amid macroeconomic uncertainty in FY25.

Looking ahead, Scott said:

We remain on track for our FY26 results to all be within target ranges as previously announced to the market in August and will report on progress at our first half results in February.

Scott said Zip had three strategic priorities for FY26; growth and engagement, product innovation, and platforms for scale.

She recapped 1Q FY26 results, commenting:

In the first quarter of FY26, your company continued to deliver sustainable, profitable growth at scale, with record cash earnings of $62.8 million, up 98.1% year on year, reflecting an operating margin of 19.5%.

The US business delivered year-on-year TTV and revenue growth (in USD) of 47.2% and 51.2% respectively, with customer growth of 12.2% (+483k) year on year providing strong momentum into the holiday trading period.

The ANZ business saw a return to revenue and Australian receivables growth with double-digit growth in TTV.

Scott said Zip had executed strategic partnerships in both the US and Australia/New Zealand (ANZ) to drive future growth.

In the US, we scaled volumes and merchants through Google Pay, and integrated with autofill on Google Chrome in August 2025. Zip also became available to all businesses on Stripe in the US in August 2025, which is yielding early results.

In Australia, we integrated with Xero Invoicing via Stripe, enabling small businesses on the Xero platform with a Stripe account to add Zip's flexible payment solutions directly on their invoices.

Scott said Zip had optimised its funding to improve capital efficiency, cost of funds, funding capacity, and flexibility in both regions.

The US business enhanced its short term funding capacity with its third-party bank partner.

In Australia we completed a new $300m bond issue and have continued to see tightened spreads on new Zip issuance.

Dual listing still an option, but no chance of dividends

Zip chair, Diane Smith-Gander AO, said management was still considering a secondary sharemarket listing in the US.

Smith-Gander said:

The potential dual listing remains subject to Zip Board approval and the completion of a number of required processes, including obtaining regulatory approvals in the US, and is subject to market and other conditions.

The chair ruled out any possibility of dividends in the near future, commenting:

We currently intend to retain any future earnings to finance the growth and development of our business, and we do not anticipate that we will declare or pay any cash dividends in the foreseeable future.

Zip share price snapshot

Zip has been an interesting ASX turnaround story after the company decided three years ago to abandon its mass global growth strategy in favour of achieving profitability in a few key markets.

This seems to be playing out well, with investors' faith somewhat restored as evidenced by Zip shares ripping 110% in FY25.

This made Zip the third fastest riser among ASX 200 financial shares in FY25.

The stock maintained its momentum in early FY26, but began declining after the company released its 1Q FY26 results on 20 October.

Potentially, some investors have taken profits after a long hard road.

The Zip share price fell 93% over three years from its record high in February 2021 to February 2024.

The stock hit a 10-year low of 26.5 cents on 6 October 2023.

Top broker Macquarie has just initiated coverage on Zip shares with a buy rating and a 12-month price target of $4.85.

Motley Fool contributor Bronwyn Allen has positions in Zip Co. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and Xero. The Motley Fool Australia has positions in and has recommended Macquarie Group and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Financial Shares

a man blown off his feet sideways hangs on with one hand to a lamp post with an inside out umbrella in his other hand as he is lashed by wind and rain with a grey cloudy sky background.
Financial Shares

Are QBE shares a buy after recent slump?

A rise in natural disasters can affect the insurer, but analysts see upside.

Read more »

A woman wearing a flowing red dress, poses dramatically on a beach with the sea in the background.
Bank Shares

Own Westpac shares? Here are the dividend dates for 2026

Westpac shares paid 153 cents per share in dividends in 2025 and are tipped to pay 155 cents in 2026.

Read more »

Two people shake hands making a deal about green energy.
Broker Notes

Does Macquarie rate AUB Group shares a buy after the deal fell through?

The AUB Group takeover deal is dead, but the business is very much alive, with Macquarie still seeing good value…

Read more »

Accountant woman counting an Australian money and using calculator for calculating dividend yield.
Financial Shares

Own AMP shares? Here's your financial calendar for 2026

Macquarie says the next catalyst for AMP shares will be the FY25 results on 12 February.

Read more »

Man putting in a coin in a coin jar with piles of coins next to it.
Financial Shares

This insurance company is a compelling buy, despite a takeover falling through, analysts say

This insurance company's shares are still looking like good buying, analysts say, despite takeover suitors walking away from a potential…

Read more »

Two children hold on tightly to books hugged against their chests, as if they were holding on to ASX shares for the long term.
Financial Shares

Own IAG shares? Here are the dividend dates for 2026

Mark these dates in your diary for the new year.

Read more »

Happy young woman saving money in a piggy bank.
Broker Notes

This ASX All Ords stock has more than doubled investors' money since January. Here's why it's tipped to surge another 45%!

A leading broker expects more outsized gains from this rocketing ASX All Ords stock. Let’s see why.

Read more »

Happy couple at Bank ATM machine.
Financial Shares

Forget CBA shares and check out this buy-rated ASX financial stock

One leading broker thinks that investors should be buying this growing company's shares.

Read more »