• Zip shares have gained as much as 12% in early trade and Afterpay has hit an-all-time high of $149.60 after Zip reported explosive growth over the holidays
  • Zip’s US business, QuadPay, delivered record results across the second quarter and the company now has 5.7 million customers across the globe
  • But from a technical perspective Zip shares might be ready to level off, one analyst says

Zip (ASX:Z1P) shares have surged to a three-month high – and Afterpay (ASX:APT) has hit an all-time one – after Zip reported strong second-quarter growth, particularly in the United States.

Zip reported its revenue in the three months to December 31 had risen 88 per cent to $102 million, compared to a year ago, while customers nearly doubled to 5.7 million.

American revenue from Zip’s QuadPay subsidiary more than tripled to $47.6 million, as 915,000 more customers joined the platform.

“We are extremely pleased to deliver another exceptional set of numbers with the quarter really delivering a step change for the company, confirming our position as one of the fastest-growing players in the sector,” said managing director and chief executive Larry Diamond.

QuadPay was ranked among the top 20 of the shopping category of the US iOS app store for most of the holiday period, and ranked by Pymnts.com as the second-most popular alternative credit app during that time. (Klarna was No. 1 and Afterpay, No. 4).

In Australia, Zip was the most-downloaded BNPL app in December with 200,000 downloads, up 21 per cent from the previous quarter.

Zip also launched in the UK in December and rolled out more Zip Business products in Australia, with a business-to-business BNPL offering called Zip Trade winning “very strong early adoption” since its December launch.

Just after 11am, Z1P shares were up 11 per cent to $6.635, while Afterpay shares had gained 5.7 per cent to $148.97, and had reached as high as $149.60.

Elsewhere in the BNPL space, Sezzle (ASX:SZL) was up 2.7 per cent to $8.15, Openpay (ASX:OPY) had gained 3.8 per cent to $2.47 and Payright (ASX:PYR) was up 1.2 per cent, while Laybuy (ASX:LBY) was down 0.7 per cent, Humm (ASX:HUM) had fallen 1.3 per cent and Zebit (ASX:ZBT) was flat.


Zip technical analysis

Bell Direct market analyst Jessica Amir said that Zip had sold off since August, when Paypal said it would enter the US market, but these quarterly results were better than expected.

“They’re actually one of the fastest-growing BNPL players,” despite not having a dominant position its home Australian market, where Zip is second to Afterpay, she said.

“That’s pretty good going, you can’t complain if you’re invested in Zip today,” she told Stockhead.

Z1P has been a favourite of social media messageboards and Facebook groups over the past year.

“You talk to some of your friends and family, they’re buying Zip, they think it’s going to do well,” Amir said. “But if you look at its chart, from a technical perspective, it looks like it’s going to level off.”

The 200-day moving average looks like it is going to cross over ones for shorter timeframes, a bearish signal, she said.