Zip Co Ltd (ASX: ZIP) shares are flying higher in Thursday afternoon trade. At the time of writing, the Australian fintech company's shares are up 9.24% to $2.01 a piece.
The latest uptick means the shares have climbed 28.8% so far in April. It's great news for investors, but the share price has a long way to go before it recovers losses shed through late 2025 and early 2026.
For the year to date, the shares are down 40%. They're now also around 58% lower than a multi-year high recorded in October last year.
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What happened to Zip shares this year?
Zip has faced several headwinds recently. The stock was caught up in the sector-wide tech sell-off earlier this year and then smashed by rising concerns about the war in the Middle East. Investors have been concerned about the global impact of the conflict. As a result, they've been shying away from high-growth technology stocks and towards more stable assets.
Earlier in February, investors were spooked by concerns about rising competition, slowing growth, and margin compression, which caused a sharp sell-off of shares.
The buy now, pay later (BNPL) provider posted a record result in February, but it still missed market expectations. Zip's revenue margin declined 7.9%, and net bad debts increased slightly to 1.73% of TTV. Zip also said it expected its second-half cash EBITDA to be broadly in line with the first half.
And why are the shares soaring higher today?
There hasn't been any price-sensitive news out of the Zip recently to explain today's price hike. So it's most likely that the share price increase is due to a combination of factors, including a shift in sentiment and investors buying back into the tech stock in the dip.
Analysts widely consider the tech stock to be undervalued and oversold. Potentially, today's uplift means that investors have finally regained confidence in the company and its outlook.
At its results announcement in February, Zip flagged that it is aggressively expanding its US presence with the launch of a new product. It is also pursuing a dual sharemarket listing on the Nasdaq in the US to potentially help drive business expansion in the region.
Zip is expected to post its third-quarter FY26 results tomorrow, which could also be helping today's rally.
Are they still a buy? Or has the opportunity now passed?
Market Index data shows that brokers are still incredibly bullish on the outlook for Zip shares over the next 12 months.
All six brokers have a strong buy rating on the stock. The average $3.82 target price implies Zip shares could rise by another 93.67% at the time of writing.
