Zip Co Ltd (ASX: ZIP) shares closed in the green again when the ASX bell rang on Tuesday afternoon.
The shares ended the day 2.8% higher, at $2.58, continuing on a huge price rally.
The latest uptick means the shares have now flown 40% higher over the past 5 days. They're also now up a massive 71% over the past month.
Despite the incredible rally, Zip shares are still 23% lower for the year-to-date thanks to a series of share price falls throughout the first six weeks of the year.
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Why are Zip shares suddenly flying higher?
The BNPL provider posted its Q3 FY26 results ahead of the ASX open last Friday morning. The company also updated FY26 guidance figures ahead off the back of the results.
The company posted record cash EBTDA of $65.1 million, up 41.5% year-on-year. Its total transaction volume grew 22.5%, total income jumped 20.2%.
Following its strong third-quarter performance, Zip has upgraded its FY26 group cash EBTDA guidance to at least $260 million and reaffirmed all key target ranges for the year.
US transaction volume is forecast to rise over 40% in FY26. Meanwhile group operating margins are expected to remain above 18%. The result seems to align with expectations that the company can maintain its credit quality while scaling up its operations.
Clearly investors were thrilled with the latest update. Zip shares have jumped over 25% since the announcement alone.
The good news came off the back of what seemed to be a turnaround in investor confidence in mid-March.
There wasn't any price-sensitive news out of the Zip ahead of the results announcement to explain why the share price was flying higher earlier this month.
The share price increase is likely due to a combination of factors, including a shift in sentiment and investors buying back into the tech stock in the dip. This has now been accelerated by a positive results announcement.
Is it too late to buy? Or is there more upside ahead?
According to TradingView data, analysts are very bullish about the outlook for Zip shares, with 11 analysts holding a consensus buy or strong buy rating.
There is more good news too. It looks like Zip shares could storm much higher this year.
The average target price is $3.83, which implies that Zip shares could fly another 49% higher over the next 12 months.
And some more are even more bullish, with a maximum price target of $5.40, which suggests 109% upside.
