Zip Co Ltd (ASX: ZIP) shares are up 6.5% to $1.68 apiece amid a broader market rally on Tuesday.
The Zip share price has been volatile over the past 12 months.
Zip has traded between a low of $1.09 on 7 April last year and a high of $4.93 on 20 October.
In 2026, Zip stock is down 50.4%.
Fund manager Blackwattle holds Zip in its Small Cap Quality Fund.
Portfolio managers Robert Hawkesford and Daniel Broeren gave their assessment of this ASX financial share in a newsletter last week.
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Zip shares offer 'compelling value', say experts
Hawkesford and Broeren said Zip faced heavy selling during earnings season despite a strong 1H FY26 result.
The buy now, pay later provider reported record cash EBTDA of $124.3 million, up 85.6%, and total income of $664 million, up 29.2%.
The managers said strong operating leverage was also evident, with operating margins expanding 580 basis points to 18.7%.
Nonetheless, Zip shares were pummelled, crashing 33% on results day.
Hawkesford and Broeren said:
Unfortunately, Zip appears to be caught in the crosshairs of two broader market themes: negative sentiment toward technology stocks amid concerns around AI disruption, and a rotation out of higher-multiple growth companies as investors place greater emphasis on valuation.
However, Hawkesford and Broeren said Zip does not fit neatly into either category, commenting:
Its BNPL offering is fundamentally a payments and consumer finance product embedded at the point of sale, with competitive advantages stemming from its merchant network and proprietary credit decisioning (and data), rather than being 'pure software'.
The managers point out that Zip shares are trading at an attractive entry point after a 50% decline year to date.
… at just 12x FY27e P/E, with significant growth potential, it is far from expensive – currently ranking, in our opinion, as one of the most compelling 'value' opportunities on the ASX.
What do other experts think?
On the CommSec trading platform, Zip shares have a strong buy consensus recommendation.
Ten of 11 analysts rating Zip on the platform give it a strong buy rating, and one offers a moderate buy rating.
On the TradingView website, Zip also scores a strong buy consensus rating.
Once again, 10 out of 11 analysts give Zip a strong buy, and one gives it a moderate buy.
The analysts' 12-month share price targets for Zip range from a low of $2.60 to a high of $5.27.
Zip is scheduled to release its 3Q FY26 results update next Friday, 17 April.
