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Zip (ASX:ZIP) share price soars on share buyback

The Zip Co Ltd (ASX:ZIP) share price has jumped 8% after announcing a share buyback. Here's what's going on...

The Zip Co Ltd (ASX: ZIP) share price has jumped 8% after announcing a share buyback.

Zip is a buy now, pay later business that helps customers fund purchases through instalments.

Zip share buyback

The buy now, pay later business said it intends to carry out an on-market share buyback of up to $50 million. The buyback is expected to start on or about 23 April 2025 for up to 12 months.

The company said its announcement reflects the strength of the Zip balance sheet, the continued delivery of operating cashflow and its outlook for future profitable growth.

Doing this is designed to “maximise shareholder returns, whilst preserving balance sheet strength and ensuring Zip maintains the ability to pursue strategic growth opportunities.”

How much it ends up buying will depend on the Zip share price and other opportunities to use the capital.

Zip said the price it pays will be no more than 5% above the average Zip share price over the five trading days prior to the purchase. Additionally, it won’t buy back more than 10% of its shares over the next 12 months.

It also announced it would bring forward the release of its FY25 third quarter update ASX announcement to 16 April 2025.

Management comments

Zip Group CEO and Managing Director, Cynthia Scott said:

We continue to execute on our strategic priorities with the Group generating strong operating cashflows and maintaining balance sheet strength. The Buy-Back program we have announced today is consistent with our capital management framework and focuses on maximising shareholder returns. Zip will maintain a strong balance sheet following completion of the Buy-Back with ongoing flexibility to pursue future growth opportunities.

Final thoughts on the Zip share price

I can see why investors are excited by this news – a share buyback can be very supportive for the share price if the company doing the buyback is a buying a sizeable amount of shares on the market each day.

Zip wouldn’t be the first share I’d buy after the volatility, but it looks interesting after sinking over 50% since 25 February 2025.

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Picture of Jaz Harrison

Jaz Harrison

Jaz is a Staff Writer for Rask. She is a keen investor who loves to thoroughly poke holes in an investment idea before it has a chance of making it into her portfolio. Jaz invests for the long-term and doesn't sweat the small stuff. She strongly believes that empowering people with knowledge is the best way for them to take charge of their finances, which is exactly the approach she takes with her own money and investments.
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At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.

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