ZIP share price in focus
Zip Co was founded in 2013 and is a financial technology company. It offers a buy-now-pay-later (BNPL) service that is popular among retail consumers.
Zip allows customers to purchase items immediately and repay them over interest-free instalments.
Zip operates on a global scale with over 79,300 retail partners and 6 million customers. In September 2020, Zip acquired US-based BNPL company Quadpay to further establish itself in the US market.
ASX shares
ASX Limited operates Australia’s primary national securities exchange. This includes the provision of securities exchange services, derivatives exchange services, central counterparty clearing services, and registry, settlement, and delivery-versus-payment clearing financial products.
The company provides access to a variety of different products, including shares, futures, exchange traded funds (ETFs), managed funds, and real estate investment trusts (REITs).
ZIP share price valuation
As a growth company, one way to put a rough guesstimate on the ZIP share price could be to compare its price-to-sales multiple over time. Currently, Zip Co Ltd shares have a price-sales ratio of 0.01x, compared to its 5-year average of 5.81x, meaning its shares are trading below their historical average. This could mean that the share price has fallen, or sales have increased, or both. In the case of ZIP, revenue has been growing over the last 3 years. Please keep in mind that context is important – and this is just one valuation technique. Investment decisions can’t just be based on one metric.
The ASX share price currently trades at a price-sales ratio of 8.25x, which compares to its 5-year long-term average of 8.12x. So, its shares are trading higher than their historical average. However, a simple multiple like this should only be the start of your research. The Rask websites offer free online investing courses, created by analysts explaining things like Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). They even include free valuation spreadsheets! Just remember there are many different ways to value a share, like ASX Ltd.
