Trying to keep up with Zip Co Ltd (ASX: ZIP) shares has become a challenge even for seasoned investors.

The buy now, pay later (BNPL) stock finished Wednesday down 5% to $2.65. That leaves the shares down around 15% over the past five trading days, 19% for the year to date, 10% over the past 12 months, and roughly 45% below their October peak.

So, what’s behind the wild swings, and what should investors be watching next?

The business is improving

Despite the volatile share price, Zip’s underlying business is arguably in the strongest position it has been in for several years.

The company is growing again, profitability is improving, analysts have become more constructive, and management continues to buy back shares under its $50 million on-market buyback program.

Just as importantly, investors are now paying closer attention to earnings rather than simply transaction growth.

That shift has worked in Zip’s favour as stronger revenue increasingly translates into higher profits.

Strong momentum continues

Zip delivered another solid operating update in the third quarter of FY26. Transaction volume rose 22.4% to $4 billion, while total income climbed 20.2% to $335.2 million.

The standout figure was cash EBITDA, which surged 41.5% to a record $65.1 million. Operating margins also expanded to 19.4%. The stronger performance prompted management to lift FY26 cash EBITDA guidance to at least $260 million.

Much of that momentum continues to come from the United States. US transaction volumes and revenue both increased more than 43% in US dollar terms during the quarter, while active customer numbers grew 9%.

Those figures suggest Zip is continuing to win new customers while existing users remain highly engaged.

One key risk remains

Not everything is moving in the right direction. Bad debts remain the biggest concern for investors. Group net bad debts increased to 1.93% of transaction volume during the third quarter, up from 1.64% a year earlier.

Encouragingly, management of Zip shares noted that US net bad debts remained stable at 1.86% and expects them to decline below 1.75% during the fourth quarter.

If that happens, it would provide further evidence that Zip can continue growing without sacrificing credit quality.

All eyes on August

The company’s next trading update on 20 August could prove pivotal.

Investors in Zip shares will be looking for continued growth in transaction volumes, another improvement in profitability, and confirmation that bad debts are moving lower.

Foolish takeaway

Zip shares remain volatile, but the company’s fundamentals are moving in the right direction.

Improving earnings, strong US growth, and ongoing share buybacks are encouraging signs.

However, with credit quality still under close scrutiny, the next earnings update could determine whether Zip’s next recovery can start, or whether the recent volatility has further to run.

The post Zip shares are going wild. What investors need to know appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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.

The Vanguard Australian Shares Index ETF (ASX: VAS) delivered a total gross return of 6.19% in FY26.

This was slightly higher than the total return of the index that VAS tracks, the S&P/ASX 300 Index (ASX: XKO).

The ASX 300 gained 2.84% in value and paid a 3.32% dividend yield for a total return of 6.16% in FY26.

After the teeny-tiny management fee of 0.07%, VAS ETF gave investors a 6.12% net return.

The VAS exchange-traded fund (ETF) closed out the year at $109.30 per unit on 30 June.

The ETF hit a 52-week high of $114.25 on 27 February.

With $25.377 billion in funds under management, VAS remains the largest ETF by market cap on the ASX today.

We’ve reviewed VAS ETF’s performance and identified the 10 stocks that rose the most within its basket.

Let’s check them out.

10 biggest risers within the VAS ETF in FY26

1. Sunrise Energy Metals Ltd (ASX: SRL)

This ASX 300 mining share stunned investors with a 2,040% gain in FY26 to finish the year at $17.23.

Sunrise Energy Metals is developing scandium and nickel-cobalt projects in central-west NSW.

2. 4DMedical Ltd (ASX: 4DX)

This ASX 300 healthcare share skyrocketed 1,786% to close out the year at $4.53.

The respiratory imaging technology company received US Food and Drug Administration (FDA) approval for its CT:VQ product in FY26.

CT:VQ is a post‑processing technology that transforms routine chest CTs into quantitative, lobar ventilation (V), and perfusion (Q) maps.

3. Minerals 260 Ltd (ASX: MI6)

This ASX 300 gold share soared 508% to end FY26 at 73 cents per share. 

This mineral explorer is building the Bullabulling Gold Project in Western Australia’s Eastern Goldfields.

4. Weebit Nano Ltd (ASX: WBT)

The Weebit Nano share price turbocharged itself 414% higher to $8.35 on 30 June.

Weebit develops advanced semiconductor memory technology.

5. Elevra Lithium Ltd (ASX: ELV)

This ASX 300 lithium share rocketed 327% higher to finish at $9.60 on 30 June.

Elevra was formed through the merger of Piedmont Lithium and Sayona Mining.

Its flagship mine is the North American Lithium Project.

6. Elsight Ltd (ASX: ELS) 

The Elsight share price soared 300% to finish FY26 at $7.10. 

Elsight’s Halo product provides Beyond the Visual Line of Sight (BVLOS) connectivity for drones, UAVs, and other unmanned air and land defence systems.

7. PLS Group Ltd (ASX: PLS)

Formerly known as Pilbara Minerals, this ASX 300 lithium share soared 275% to $5.02 apiece.

The company’s flagship is the Pilgangoora Operation, the world’s largest independent hard-rock lithium mine. 

Like all ASX lithium miners, PLS shares benefited from rapidly rebounding lithium commodity prices in FY26.

8. Electro Optic Systems Holdings Ltd (ASX: EOS)

The Electro Optic Systems share price increased 261% to close FY26 at $10.30.

Electro Optic specialises in defence technology, advanced weapon systems, and counter-drone solutions.

9. Macmahon Holdings Ltd (ASX: MAH) 

This ASX 300 materials share increased 213% to finish the year at 96 cents apiece.

Macmahon is a contract mining and civil infrastructure company providing operations services in Australia and Southeast Asia.

10. Mineral Resources Ltd (ASX: MIN) 

The Mineral Resources share price soared 188% to finish the year at $62.65.

The stock was in rebound mode after corporate governance issues and financial concerns dragged it down in FY25.

The post Own VAS ETF? Here’s how your investment performed in FY26 appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen 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 Electro Optic Systems. 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.

Reporting season can make the share market feel unusually dramatic.

A company can announce record revenue and watch its share price fall. Another can report declining profit and still rally strongly. During these weeks, the market is not simply judging whether the numbers are good or bad. It is judging how those numbers compare with expectations.

That distinction matters. For long-term investors, reporting season should be less about reacting to the scoreboard and more about understanding how the business is progressing.

What is reporting season?

Twice a year, most ASX-listed companies provide shareholders with a detailed update on their financial performance.

Companies with a 30 June financial year typically release full-year results in August and half-year results in February. These updates commonly include financial statements, an investor presentation, management commentary, dividend information, and sometimes an earnings call with analysts. 

Together, these materials provide a snapshot of what the company earned, spent, owned, owed, and generated in cash over the reporting period.

They also give investors an opportunity to compare the latest performance with previous results, management’s earlier promises, and the assumptions underpinning their investment thesis.

Look beyond the headline profit

Revenue and net profit usually attract the biggest headlines. They matter, but neither number tells the full story.

A growing company may report higher revenue while its margins shrink because wages, materials, energy, or customer acquisition costs have risen. Another may produce impressive accounting earnings but convert relatively little of that profit into cash.

Investors might therefore consider several broader questions.

Is revenue growing organically, or has the company relied on acquisitions? Are margins expanding or contracting? Is operating cash flow keeping pace with profit? Has debt risen, and can the business comfortably service it? Is management reinvesting capital sensibly, paying dividends, or buying back shares?

It is also worth separating recurring earnings from one-off benefits. Asset sales, favourable currency movements, reserve releases, or temporary commodity price spikes can boost a single result without improving the underlying business.

The most useful measures also vary by industry.

For banks, investors may examine net interest margins, loan arrears, bad-debt provisions, and capital strength. Retailers can be assessed through comparable sales, gross margins, discounting, and inventory levels. Miners may be judged on production, realised prices, unit costs, capital expenditure, and free cash flow. Software businesses often require attention to recurring revenue, customer retention, and whether higher sales are translating into operating leverage. 

The economic clues hiding in company results

Reporting season also provides a ground-level view of the Australian economy.

This year, inflation, interest rates, and rising operating costs are likely to feature prominently. Businesses with genuine pricing power may be able to pass higher costs to customers without severely damaging demand. Others may face pressure on profit margins as households and businesses become more selective with their spending.

Banks and consumer-facing companies could offer clues about mortgage stress, loan arrears, household demand, and the health of the housing market. Resource companies remain exposed to commodity prices and geopolitical uncertainty, while technology results may reveal whether enthusiasm around artificial intelligence is translating into sustainable revenue and profits.

Expectations themselves may add to the volatility. Quantitative funds and other short-term traders can react rapidly to even small earnings surprises. That creates the potential for unusually large share price movements in either direction. 

One result is not the whole story

A reporting period covers only six or 12 months. A long-term investment thesis may span many years.

A disappointing result does not automatically mean a good business has become a poor one. Equally, one outstanding period does not guarantee that strong growth, high margins, or generous dividends will continue.

The better question is whether the latest update confirms, weakens, or changes the long-term story.

Is the company strengthening its competitive position? Is management delivering on earlier commitments? Are earnings and cash flow moving in the right direction across several reporting periods? Does the balance sheet provide room to invest through difficult conditions?

Share prices may swing sharply as investors vote on the latest numbers. Over longer periods, however, the market is more likely to weigh what ultimately matters: the earnings, cash flow, and value the underlying business can sustainably produce.

The post How should investors approach ASX reporting season? appeared first on The Motley Fool Australia.

More reading

• Zip shares are going wild. What investors need to know
• Own VAS ETF? Here’s how your investment performed in FY26
• The bring-forward rule just got bigger. Here’s what that means for your superannuation
• 5 things to watch on the ASX 200 on Friday
• James Hardie shares are flying. Here’s why the rally may not be over

Motley Fool contributor Leigh Gant 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.