Zip shares jump as US competitor Sezzle hikes guidance
Make us a preferred source
Make us a preferred source on Google
The news: Zip shares surged in early trading after the buy now, pay later lender's US competitor Sezzle upgraded its revenue guidance overnight.
The numbers: Zip shares were up 7.7% to $3.03 by 10:50am AEDT, making it the top performer across the ASX 200, having advanced nearly 450% over the last year.
Minneapolis-based Sezzle upgraded its revenue guidance to exceed 55% year-on-year growth in CY24, citing "exceptional holiday demand".
Sezzle shares closed 11.2% higher on the Nasdaq, and added 17.6% in after hours trading on Wall Street.
The context: Citi analysts noted "positive read throughs" from Sezzle's upgrade. They also flagged that Sezzle's credit losses are in line with forecasts, consistent with Zip's recent comments that net bad debts are tracking to expectations.
Citi expects Zip's second quarter to benefit from a weaker Australian dollar, and sees upside risk to Visible Alpha's consensus cash EBITDA forecast of $153 million.
Citi is 'neutral' rated on Zip with a $3.15 target price.
The sources: Nasdaq announcement, Citi research
