Zip Co Ltd (ASX: ZIP) shares climbed 2.3% higher to $2.25 a piece, at the time of writing. The latest uptick means the stock is now down 33% for the year-to-date.
The digital financial services company has suffered a volatile start to 2026 so far, with its share price swinging anywhere between $1.45 and $3.56 a piece.
After crashing over 40% from a multi-year high late last year, Zip shares continued to consistently tumble through the first through months of 2026.
By mid-March, the stock had lost another 56% of its value.
The tech shares then staged a u-turn and quickly climbed 57% higher in April alone. While the market was optimistic the price climb would continue, the share price softened again through March.
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What caused the sharp share price selloff over the past seven months?
Zip shares have lost 31% of their value between peaking at a multi-year high in October last year and the end of 2025.
The company was caught up in a tech sector-wide sell-off and this was likely exacerbated by investors taking gains off the table after a strong share price rally.
The shares also suffered pressure from short sellers in late-2025.
In 2026, the headwinds continued. The company's first-half FY26 results in February missed expectations and its value crashed quickly as investors fled from their shares.
Investors were spooked by concerns about rising competition, slowing growth and margin compression.
More recently, a softer share price is likely down to slumping sentiment. Technology and growth shares have been under pressure again this month as investors reassess valuations and risk appetite.
Meanwhile, concerns about higher interest rates, global uncertainty, and concerns around consumer spending have all weighed on the sector.
So, if I bought $10,000 of Zip shares 12 months ago, what are they worth now?
While the share price fell quickly through early-2026, a recent rebound means the shares are still 18% higher than 12 months ago, at the time of writing.
That means that $10,000 invested in Zip shares a year ago is worth $11,800.
What's next for Zip shares?
It looks like analysts are unanimous that Zip shares are now oversold and undervalued.
Brokers widely expect strong upside for the buy-now-pay-later (BNPL) provider over the next 12 months, too.
Market Index data shows that brokers have a strong buy consensus on the shares. They tip an average 70% upside to $3.83 over the next 12 months.
TradingView data shows a very similar sentiment. The data also shows a consensus buy rating and an average target price of $3.83 implies a 70% upside, at the time of writing. But others are even more bullish and are tipping the shares to soar another 140% to $5.40 each.
Why are Zip shares expected to fly higher?
Zip's financial results have been robust over the past few quarters. Its latest third-quarter FY26 results announcement in mid-April showed that growth has started to accelerate.
Zip reported a 22.4% year-on-year increase in its total translation volume (TTV). The company also confirmed a 20.2% increase in total income, a higher operating margin of 19.4% and confirmed it has grown its active customer base by another 3.5%.
The fintech business also upgraded its FY26 group cash EBTDA guidance to at least $260 million, from previous guidance of around $248.6 million.
The company is aggressively expanding in the US too. Its US transaction volume is forecast to rise over 40% in FY26. Meanwhile group operating margins are expected to remain above 18%.
Zip is also pursuing a dual sharemarket listing on the Nasdaq in the US. This could also help to drive even opportunity for business expansion in the area.
