The Zip Co Ltd (ASX: ZIP) share price has been highly volatile over the past few months, as the chart below shows. Since the start of 2026, it has dropped by 39%, so it's worthwhile looking at whether the business is an opportunistic buy today.
The buy now, pay later business continues to report top-line growth, but its profitability is increasingly challenged in recent times.
The latest update from the business showed the ongoing overall progress of the business, but it also hit some bumps.
Image source: Getty Images
FY27 first quarter performance
In the three months to 30 September 2026, total transaction volume (TTV) grew 18% to $4.6 billion and US TTV increased 34.1% (in US dollar terms).
Total income increased 17% to $376.1 million following a 21.8% increase of transactions to 31.6 million.
However, net bad debts worsened to 1.97%, up from 1.65% of TTV in the first quarter of 2026. The US bad debts were 1.93% of TTV.
It said that cash EBTDA (operating profit) grew by 3.4% year-over-year to $65 million, which includes $10.1 million of operating expenses because of an external fraud 'event' in the US. This fraud involved "coordinated individuals establishing new accounts using legitimate credentials to execute unpaid transactions".
Zip said that the fraud temporarily impacted TTV and new customer growth in July and August and resulted in US$7.2 million (A$10.1 million) of cash operating expenses.
Excluding the fraud expenses, adjusted cash EBTDA would have risen 19.5% to $75.1 million (or 28.7% growth on a constant currency basis).
Despite those headwinds, the business still expects to deliver FY27 US TTV growth of more than 30% in US dollar terms, balancing profitability and loss performance. It's targeting a US net bad debt range of between 1.5% to 2% of TTV.
Let's see if Zip's share price is undervalued at this value. .
Is the Zip share price a buy?
According to CMC Invest, there have been seven ratings on the business within the last three months. All of those broker ratings were a buy.
A price target is where experts think the share price will be in a year from the time of their rating.
The average price target from those seven experts is $3.65, which implies a possible rise of 79% within the next year.
That'd be a huge rise, if it happens, so it could be worthwhile taking a closer look at the ASX share, but I think there are even better opportunities out there.
