Zip Co Ltd (ASX: ZIP) shares are charging higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) stock closed yesterday trading for $2.52. In early morning trade on Thursday, shares are changing hands for $2.64 apiece, up 4.8%.
For some context, the ASX 200 is up 1.1% at this same time.
Here’s what’s catching investor interest.
Zip shares lift on strong April performance
Zip shares are jumping higher following the company’s presentation at the annual Macquarie Group Ltd (ASX: MQG) Conference.
That presentation included a trading update for April.
Investors are reacting positively after Zip reported ongoing strong growth in April.
In its core growth market of the United States, the ASX 200 BNPL company reported a year-on-year total transaction volume (TTV) increase in April of more than 40% (in US dollar terms).
And management said that Zip’s US credit outcomes have been performing in line with expectations and are on track to be at least 1.75% of TTV for Q4 FY 2026.
And in its Australia and New Zealand segment, Zip said it now serves 1.9 million “highly engaged customers”, which the company noted represents some 10% of the Australian adult population.
Zip shares also look to be getting support today, with the company reaffirming its full-year FY 2026 guidance.
Zip expects to achieve full-year cash earnings before taxes, depreciation and amortisation (EBTDA) of $260 million, with at least 40% TTV growth in its US markets (in US dollar terms). The company expects an operating margin of 18% and a revenue margin of 8%.
As for bad debts, the company forecasts its fourth-quarter losses will be around 1.75% of TTV.
How has the ASX 200 BNPL share been tracking in FY 2026?
Zip shares closed up 13.7% on 17 April following the release of the company’s third-quarter results.
Highlights for the three months included record cash EBTDA of $65.1 million, up 41.5% year on year. And TTV of $4.0 billion was up 22.4%.
At the end of the quarter, Zip had 6.5 million active customers, up 3.5% year on year. And the number of merchants on Zip’s platforms increased by 12.7% to 93,900.
Commenting on the quarterly results, Zip CEO and managing director Cynthia Scott said:
Zip’s resilient business model continues to drive increased profitability at scale, delivering record cash earnings of $65.1 million, up 41.5% year on year. Operating margin expanded 292bps to 19.4%, reflecting strong unit economics and significant operating leverage.
Momentum continued across both markets, underpinned by deepened customer engagement and disciplined execution.
The post Why are Zip shares storming higher on Thursday? appeared first on The Motley Fool Australia.
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Motley Fool contributor Bernd Struben 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 Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.