Zip Co Ltd (ASX: ZIP) shares have enjoyed a remarkable comeback since notching one-year lows on 7 April.
On Monday, shares in the S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) stock closed up 2.6%, trading for $3.34 apiece.
That sees Zip shares up a whopping 180.7% since closing for $1.19 on 7 April.
Or enough to turn an $8,000 investment into $22,960.
While 2026 might not see the same share price surge, it is worth recalling that back in February 2021 Zip stock was fetching $12.35 a share. Or some 270% above Monday's close.
Why this fundie likes Zip shares
QVG Capital's Chris Prunty counts among the fund managers with a bullish outlook for the ASX 200 BNPL stock in 2026 (courtesy of The Australian Financial Review).
According to Prunty:
The model's appeal for shareholders lies in very high returns on capital and lower-than-assumed risk: loans are small, short in duration, and the book turns rapidly, keeping losses contained and capital needs light.
Prunty also said that management is now walking the walk when it comes to cost management, noting that operating discipline "is finally aligned to unit economics".
And he isn't along in recommending Zip shares as a buy.
Consensus analyst recommendations on CommSec have the stock listed as a 'strong buy'. Breaking that down, seven analysts recommend the BNPL company as a strong buy, one recommends it as a moderate buy, and two recommend holding. There are no sell recommendations listed.
BNPL stocks like Zip shares have proven to be highly sensitive to interest rates. And with the US Federal Reserve still expected to cut rates one or two times in this easing cycle, the company – which has a big operating footprint in the US – could well enjoy some added tailwinds in 2026.
What's the latest from the ASX 200 BNPL stock?
Zip released its first quarter (Q1 FY 2026) results on 20 October.
Highlights from the three months included all-time high cash earnings before taxes, depreciation and amortisation (EBTDA) of $62.8 million, up 98.1% year-on-year. And Zip's total transaction volume (TTV) of $3.9 billion was up 38.7%.
That was spurred by a 5.3% year-on-year increase in the company's active customers, which reached 6.4 million at the end of the first quarter.
Looking ahead, Zip CEO Cynthia Scott said, "We remain focused on executing our strategic priorities of growth and engagement, product innovation and platforms for scale."
Investors responded to the Q1 results by sending Zip shares up 4.3% on the day.
