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Zip Co Ltd (ASX: ZIP) shares are pushing higher again on Monday as buyers return to the buy now, pay later (BNPL) stock.

At the time of writing, the Zip share price is up 8.33% to $3.12.

That extends a strong recent run for the ASX 200 stock. Zip shares are now up around 40% over the past month, although they remain below their 52-week high of $4.93.

More than 18 million shares had changed hands by early afternoon, with Zip trading between $2.93 and $3.14.

Here’s what appears to be helping sentiment today.

Profit momentum is doing the work

The main reason buyers are returning is that Zip is no longer being judged only on transaction growth.

According to Zip’s latest quarterly update, total transaction volume (TTV) rose 22.4% to $4 billion in the third quarter of FY26.

Total income increased 20.2% to $335.2 million.

More importantly, record cash EBTDA rose 41.5% to $65.1 million, while the operating margin expanded to 19.4%.

That was enough for management to upgrade FY26 group cash EBTDA guidance to at least $260 million.

The US business is still doing much of the heavy lifting though.

Zip said US transaction volume and revenue both grew more than 43% in US dollar terms, while US active customers increased 9%.

Bad debts are still being watched

While the growth is certainly positive, bad debts still remain one of the key risks.

Group net bad debts rose to 1.93% of transaction volume in the third quarter, up from 1.64% a year earlier.

However, Zip advised US net bad debts were steady at 1.86% of transaction volume and are expected to fall below 1.75% in the fourth quarter.

Nonetheless, the next update will be very important. Zip has the profit momentum, but it still needs to show that its bad debts are under control.

Brokers still see some upside

The broker backdrop also looks supportive.

Recent price targets include $3.10 from UBS, $3.40 from Macquarie, $3.80 from Jefferies, and $4.00 from Ord Minnett.

TradingView data also shows analysts have an average 12-month price target of $3.82 for Zip, with estimates ranging from $2.60 to $5.40.

At $3.82, the average target still sits above where Zip shares are trading today.

However, the stock has moved quickly.

The relative strength index (RSI) is sitting around 70, which points to strong momentum. But after a 40% monthly gain, it also tells us that Zip may be running a little hot in the short-term.

Can the rally keep going?

Zip is in a much better position than it was a few months ago.

The company is growing, earnings are improving, brokers remain positive, and the share buyback is still running in the background.

Zip announced an on-market buyback of up to $50 million in February, with regular buyback updates continuing through June.

However, the stock has already moved quickly over the past month, so the next update will need to excite the market.

The post Zip shares are flying again. Is this ASX 200 stock finally back in favour? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.

Turaco Gold Ltd (ASX: TCG) has caught the eye of a few brokers recently, after it released a positive prefeasibility study for its Afema Gold Project in southeast Côte d’Ivoire.

This time, we’re having a look at what the team at Morgans is saying about the company and how much they think its shares are worth.

First, let’s look at the company’s project.

New mine to drive share price growth

Turaco earlier this month declared a maiden ore reserve of 1.91 million ounces of gold, which it says will sustain a mine producing more than 200,000 ounces of gold per year.

And in terms of the mine’s revenue generation, the company published figures for a range of gold prices, but at US$4,000 per ounce – close to the current spot price of US$4,071.84 – the mine would generate gross revenue of US$8.095 billion over its life of 10.3 years.

The project would also have a payback period of 10 months, or 17 months if the gold price was US$3,000 per ounce.

Turaco said there was the possibility of extensions to the mineral resources, with all deposits open at depth and along strike, and there were also “numerous” additional exploration targets.

The company has immediately started a definitive feasibility study, which will also include commencing detailed design and engineering.

On the exploration front, the company will be continuing drilling with between three and five rigs operating.

Turaco Managing Director Justin Tremain said regarding the study:

In just a little over 2 years since acquiring Afema, the Turaco team has not only delivered extraordinary JORC Resource growth to 4.65 million ounces but has now also delivered a detailed development study with a maiden JORC Probable Ore Reserve estimate of just under 2 million ounces of gold based on a conservative gold price of US$2,000/oz and an AISC of just over US$1,500/oz, all within a granted mining permit. This progress is unmatched. The Study is the culmination of an extensive body of work including over 100,000m of drilling, comprehensive metallurgical variability test work, geotechnical test work, process and mine design, costing and scheduling.

Mr Tremain said the company was aiming to finish the definitive feasibility study by the second quarter of calendar year 2027 and to commence early works to allow first gold production in 2029.

Shares still looking cheap

The team at Morgans likes the project, but has sharply downgraded its price target for the company in its recent note to clients.

The analysts said:

While the prefeasibility study reinforces our conviction in Afema, following the transition of coverage, we have updated our forecasts to reflect the study outcomes and revised our valuation methodology. We also revise our recommendation to speculative buy, reflecting our reassessment of sovereign risk, together with the increased funding and execution risks associated with TCG’s transition from explorer to developer.

Morgans has a price target of $1.18 on Turaco shares, compared to $2.19 previously.

Macquarie also recently published a research report on Turaco with a price target of $1 per share.

Turaco shares are currently valued at 47 cents. The company is valued at $506.2 million.

The post Want a 151% return? One broker thinks this ASX gold company could deliver appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England 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 recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.