Zip shares have fallen 85% this year but Diamond still says ‘We can be the next CBA’

The Zip Co Ltd (ASX: ZIP) share price has been struggling in the year to date, but are there better days ahead?

Zip shares have shed 85% since market close on 31 December and are currently fetching 63 cents apiece.

In today’s trade, the Zip share price is currently holding steady at yesterday’s closing price. For perspective, the S&P/ASX 200 Index (ASX: XJO) is 0.2% higher at the time of writing.

Let’s take a look at what could be ahead for the Zip share price.

The next CBA?

The Zip share price may be having a tough year but it’s been on a roll in the last week. Zip shares have gained more than 5% since market close on 17 October. As my Foolish colleague Sebastian noted yesterday, Zip’s latest quarterly update was well received.

And Zip’s CEO and founder Larry Diamond is confident the company can turn its fortunes around.

In an interview with the Australian Financial Review (AFR), Diamond touted Zip could become the next Commonwealth Bank of Australia (ASX: CBA). He said:

We still believe, in this market, we can be the next CBA. Why not? We have the right leadership, the best technology, and the best people. We are committed to the long term.

Diamond moved to the USA with his wife and family earlier this month to focus on the market there. He said he sees America as a “significant opportunity”.

Zip’s transaction volume leapt 15% in the first quarter to $2.2 billion, as my Foolish colleague James reported last week.

The company’s revenue also increased 19% to $163.2 million, while customer numbers surged 50% to 12 million.

Diamond, speaking to the AFR, said Zip could move into the mortgage business in the future, adding:

There is no reason why deposits and mortgages can’t be inside Zip, if customers trust us.

With the right passionate leadership, infrastructure and technology, if we maintain healthy financial standing – then yes, we can.

Share price snapshot

The Zip share price descended nearly 91% in the past year, while it has fallen 9% in the past month.

For perspective, the ASX 200 has shed nearly 9% in the past year.

Zip has a market capitalisation of more than $442 million based on the current share price.

The post Zip shares have fallen 85% this year but Diamond still says ‘We can be the next CBA’ appeared first on The Motley Fool Australia.

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More reading

• How has the Zip share price been tracking in October?
• These are the 10 most shorted ASX shares
• Zip share price charges 13% higher on Q1 update
• Has ‘growth at all costs’ been the undoing of Zip shares and what now?
• If I’d bought $1,000 of Zip shares at their all-time high, here’s how much I’d have left

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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