The Zip Co Ltd (ASX: ZIP) share price is having a rough Thursday session.

The buy-now, pay-later company’s shares have fallen heavily to around $2.09, adding to what has already been a volatile year for shareholders.

At this level, the Zip share price is well below its recent highs. But has the sell-off gone far enough to create a buying opportunity?

I think there is a strong case that it has.

How cheap is the Zip share price?

I think some context around the share price could be helpful.

Zip shares have traded as high as $4.94 over the past 52 weeks and as low as $1.38. At $2.09, the stock is now almost 60% below that 52-week high.

Of course, a falling share price does not automatically make a stock cheap. The more important question for me is what investors are paying relative to the earnings Zip could generate over the next few years.

On that front, the valuation is starting to look quite interesting.

Consensus forecasts indicate earnings per share (EPS) of approximately 15 cents in FY27.

At a share price of $2.09, Zip shares are trading at a forward price-to-earnings (PE) ratio of roughly 14 times FY27 forecast earnings.

The valuation becomes even cheaper again next year if Zip meets expectations.

Consensus EPS is expected to rise to 18 cents in FY28. That would put the shares on a forward PE ratio of around 12 times.

By FY29, analysts are forecasting EPS of 22.4 cents, which would reduce the PE ratio to just over 9 times at today’s share price.

For a business still expected to deliver meaningful earnings growth, I think those multiples look cheap.

Why I think the sell-off creates an opportunity

Zip is still a growth investment, so I would not look at the current valuation in isolation.

The investment case depends on the company continuing to expand earnings over the coming years. If the consensus forecasts are roughly right, EPS would rise by almost 50% between FY27 and FY29.

Investors need to remember that growth stocks can remain volatile. Zip has already moved between $1.38 and $4.94 during the past year, showing just how quickly market sentiment can change.

Forecasts can also move. If earnings growth disappoints, the low forward PE ratios based on FY28 and FY29 expectations may prove less compelling than they currently appear.

Still, I think today’s share price gives investors a reasonable margin for some uncertainty.

Foolish takeaway

For me, the Zip share price is looking cheap at around $2.09.

A FY27 PE ratio of roughly 14x does not look demanding, and the valuation could fall into the single digits by FY29 if current earnings forecasts are met.

There is plenty that Zip still needs to deliver, and I would expect the share price to remain volatile along the way. But after such a sharp fall from its 52-week high, I think the risk/reward is compelling.

At $2.09, I would be comfortable buying Zip shares and holding them for the next few years.

The post Is the Zip share price a bargain at $2.09? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino 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.

Fortescue Ltd (ASX: FMG) shares are down around 1% to $16.65 on Thursday morning.

The decline means the miner’s shares are now down around 24% year to date.

For context, the S&P/ASX 200 Index (ASX: XJO) is down 1% today and around 1% for the year-to-date.

It’s been a tough couple of months for the global mining giant. After its shares hit a two-year high of $22.99 in May, they’ve slowly but gradually tumbled downwards.

Just last week, Fortescue shares hit an annual low of $16.22 a piece.

Fortescue’s shares were hit by headwinds from iron ore prices. The company generates substantial cash flow from its large iron ore operations, so rising iron ore prices act as a tailwind and falling prices act as a headwind for the miner’s shares.

Trading Economics data shows that iron ore prices spiked to around US$111 per tonne in May, hit an annual low of around US$93 per tonne in August, and are currently trading at around US$97 per tonne.

Ongoing conflict in the Middle East has also put downward pressure on shares, driven by concerns about rising costs, oil supply risks, and broad market uncertainty.

A mixed FY26 result last month, including a 9% increase in revenue, 9% increase in EBITDA, and a 15% decrease in statutory net profit after tax (NPAT), didn’t help the share price either.

The question now is, where will the shares go next?

Here’s what the experts think.

What do brokers tip for Fortescue shares?

Analyst forecasts are a mixed bag.

Market Index data shows brokers are divided equally among buy, sell and hold ratings. The $18.66 average target price implies around an 11% upside, at the time of writing.

On TradingView, the majority of analysts (10 out of 16) have a hold stance on Fortescue shares. Another four rate the shares as a sell/strong sell, and two rate them as a strong buy.

The average $17.59 target price implies a potential 6% upside ahead. Although some think the shares could jump another 32% to $22.01 over the next 12 months, at the time of writing.

Joshua Baker from RaaS Group has a sell rating on the ASX mining shares and warns that the outlook for iron ore prices isn’t as appealing as other commodities.

The team at Morgans have a hold rating on Fortescue shares. The broker said that with the focus on FY27 guidance, Iron Bridge remains a key issue. It explained that the magnetite operation is struggling through ramp-up and with elevated costs. Elsewhere, Morgans said the miner’s plans for a green steel plant are difficult to quantify.

What could drive Fortescue shares higher this year?

An iron ore price recovery would obviously help to drive the shares higher over the next 12 months, as would any progress on its green steel plant.

Fortescue is also actively diversifying its business beyond iron ore and into other markets, such as copper and renewable energy, which could reduce its reliance on iron ore over the long term and also strengthen its bottom line.

The post What do brokers tip for Fortescue shares over the next 12 months? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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.

What a difference a day makes for Core Lithium Ltd (ASX: CXO) shareholders.

After jumping 12% yesterday, the lithium miner has gone backwards on Thursday, falling 7.74% to 38.8 cents in morning trade.

The selling follows a string of company announcements released this morning, giving investors plenty to digest after the stock’s recent rally.

Despite today’s decline, Core shares have still gained approximately 269% over the past year following a remarkable recovery.

So, let’s take a closer look at what’s going on with Core Lithium?

Cash piles up, but losses continue

Core’s FY26 annual report shows a significant improvement in the company’s financial position, although there’s still some work to do.

The lithium miner finished June with $181.8 million in cash, compared with just $23.5 million a year earlier.

Much of that improvement came from a $120 million share placement and funding arrangements with Glencore and InfraVia.

However, Core still reported a net loss of approximately $26 million, while operating cash outflows totalled $21.1 million.

The company also received approximately $62.2 million in additional funding after the financial year ended.

Finniss is back in business

The good news is that Core’s flagship Finniss lithium operation is making progress following its restart.

Earlier this month, the company produced its first spodumene concentrate from the processing plant, meeting its September quarter target.

According to the release, the milestone was achieved within 6 months of the final investment decision (FID) in March.

Core has also completed upgrades to the processing plant, which are expected to increase annual throughput capacity by approximately 20% to 1.2 million tonnes.

Meanwhile, development continues at the BP33 underground mine, with first ore targeted for mid 2027.

The next milestone will be the first shipment of newly produced lithium concentrate, which Core expects during the December quarter.

What’s behind Thursday’s sell-off?

While the annual report contains some encouraging developments, lithium prices have been heading in the opposite direction of late.

According to Trading Economics, lithium carbonate was trading at approximately 135,200 Chinese yuan per tonne on Wednesday.

This is down 15.76% over the past month.

The recent pullback comes as more Aussie lithium mines return to production, with investors keeping a close eye on the potential increase in supply.

Following Core’s recent share price rally, some investors may also be taking the opportunity to lock in profits.

I think Core Lithium’s next test is getting Finniss running consistently and generating cash, particularly with lithium prices below their recent highs.

The post Why are Core Lithium shares crashing 8% on Thursday? 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.