ZIP share price in focus
Zip Co is a ‘fintech’ company founded in 2013. It offers a buy-now-pay-later (BNPL) service that is popular among retail consumers.
Zip’s platform allows customers to purchase items immediately and repay them over several interest-free instalments.
Like most BNPL companies, Zip makes money through transaction fees paid by the business, as well as late fees charged to customers who miss payments.
COH shares
Cochlear, established in 1981 in Sydney, is a leading medical device company specializing in hearing solutions. The company designs, manufactures, and distributes three types of hearing implants tailored to various medical needs.
As a global leader in hearing technology, Cochlear has delivered over 750,000 implantable devices and employs more than 5,000 people across 50+ countries.
ZIP & COH 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. This can tell us how the company has historically been valued relative to its total revenue.
Currently, Zip Co Ltd shares have a price-sales ratio of 3.22x, compared to its 5-year average of 5.81x, meaning its shares are trading lower than 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. Of course, context is important – and this is just one valuation technique. Investment decisions can’t just be based on one metric, but this can be a rough starting point.
The COH share price currently trades at a price-sales ratio of 8.03x, which compares to its 5-year long-term average of 9.18x. So, COH shares are trading lower than their historical average. Don’t forget, 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! It’s a good idea to use multiple valuation methods to value a share like Cochlear Ltd.
