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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is dropping lower and on course to end its winning streak. The benchmark index is currently down 0.4% to 5,917.6 points.

Four shares that have not let that hold them back today are listed below. Here’s why they are storming higher:

The Baby Bunting Group Ltd (ASX: BBN) share price is up 6% to $1.74. Investors have been buying the baby products retailer’s shares after the release of a trading update this morning. According to the release, Baby Bunting’s FY 2021 comparable store sales growth to 2 October was 17%. Excluding its stores in the Melbourne metropolitan region, its comparable store sales would have been up 28.5%.

The Northern Star Resources Ltd (ASX: NST) share price has jumped 7% higher to $14.81 after announcing a merger with Saracen Mineral Holdings Limited (ASX: SAR). Management notes that the merger will create a top 10 global gold company targeting production of 2 million ounces of gold per annum exclusively in tier-1 locations. It also expects the merger to result in unique pre-tax synergies of $1.5 billion to $2 billion.

The Oil Search Limited (ASX: OSH) share price is up almost 4% to $2.81. The catalyst for this was a strong rebound in oil prices overnight. Prices jumped higher amid a combination of COVID-19 stimulus hopes and production disruption in Norway. The S&P/ASX 200 Energy index is up 1.7% at the time of writing.

The Telix Pharmaceuticals Ltd (ASX: TLX) share price has stormed almost 6% higher to $1.74. This follows an announcement which revealed that the clinical-stage biopharmaceutical company’s 18F-FET product has been granted Orphan Drug Designation for the positron emission tomography (PET) imaging of glioma by the US FDA. The granting of this designation qualifies Telix for various drug development incentives. These could include FDA-administered market exclusivity for seven years and waived FDA prescription drug user fees.

More reading

• Telix (ASX:TLX) share price jumps 8% higher on FDA update
• Meet the latest ASX small cap stock that’s racing ahead during COVID
• Northern Star (ASX:NST) and Saracen (ASX:SAR) announce mega merger
• Baby Bunting (ASX:BBN) share price on watch after very strong Q1 sales growth
• ASX 200 up 2.3%: Big four banks charge higher, Qantas soars, energy shares jump

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Douugh Ltd (ASX: DOU) is a fintech company that collects consumer banking data which then results in tailored ongoing financial coaching, mentoring and guidance to the user. The company recently completed its $18 million inital public offering (IPO) at 3 cents per share and more than doubled on its ASX debut on Tuesday. It currently operates in the US with intentions to launch into Australia and international markets. As an exciting fintech play that aims to disrupt the traditional global banking system, could the Douugh share price emerge as an ASX tech share unicorn to buy?  

How is it different from a bank or neobank?  

Douugh is different to existing Australian neobanks such as Xinja, Up Bank, Volt and 86 400 as it is not a licenced bank. It has however secured two banking partners, one in the US (Choice Bank) and one in Australia (Regional Australia Bank), enabling it to accept deposits and issue a bank account guaranteed under the Australian Government’s Financial Claims Scheme. This business model means that it is not forced into operating a traditional balance sheet model which typically relies on price competition through deposit and lending products. Instead, Douugh operates as a software and services business, charging end consumers fixed and variable fees.

Furthermore, Douugh has also signed a long-term, strategic innovation and marketing partnership agreement with Mastercard, initially starting in the US and Australia to assist with growth. This agreement allows Douugh to issue a Douugh-branded Mastercard debit card via its bank partner, provides significant marketing support to each country and early access to new technology licencing and collaboration opportunities. 

How will the company make money? 

Douugh is currently executing the first phase of its growth strategy, offering a smart bank account and debit card offering that is powered by AI driven insights and money management features under a subscription model. Its customers can connect existing bank accounts and credit cards to get a single view of their balances. It aims to expand on its product features by converting to a paid subscription offering that will incorporate the following: 

• Wealth management
• Cashback rewards 
• Credit score monitoring 
• International remittance 
• Access to product marketplaces 

In the long term, the company aims to transition into SME banking and offer integrations to key accounting platforms such has Xero, Quickbooks and MYOB. It also intends to expand into other key international markets such as Europe, Asia and South America. 

Is the Douugh share price a buy?

The company is in its infancy and will likely require additional capital in the future to expand into international markets, grow its product suite and acquire market share. I do however, admit that it has a refreshing approach to traditional banking with a roadmap for additional features in investing, open banking and tapping into the SME market. There are significant risks in investing in such a small company, but Douugh could be onto something. 

More reading

• Why Baby Bunting, Northern Star, Oil Search, & Telix shares are storming higher
• Why IAG, Mayne Pharma, Mesoblast, & Temple & Webster shares are tumbling lower
• Telix (ASX:TLX) share price jumps 8% higher on FDA update
• Meet the latest ASX small cap stock that’s racing ahead during COVID
• Northern Star (ASX:NST) and Saracen (ASX:SAR) announce mega merger

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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In morning trade on Tuesday the S&P/ASX 200 Index (ASX: XJO) has given back its early gains and is dropping lower. At the time of writing the benchmark index is down 0.4% to 5,918.1 points.

Four shares that have fallen more than most today are listed below. Here’s why they are tumbling lower:

The Insurance Australia Group Ltd (ASX: IAG) share price has fallen 2% to $4.54. This morning the insurance giant revealed that it has settled the class action brought against it by Johnson Winter & Slattery. These proceedings relate to add-on insurance products sold through motor vehicle and motorcycle dealers. The settlement involves a gross payment of $138 million and is subject to approval by the Federal Court of Australia.

The Mayne Pharma Group Ltd (ASX: MYX) share price has crashed 17% lower to 31.5 cents after the release of an update. The pharmaceutical company advised that it has received a response from the US Food and Drug Administration (FDA) in relation to its abbreviated new drug application for a generic version of NUVARING. The FDA has raised questions about the application, which Mayne Pharma will address in a timely manner.

The Mesoblast limited (ASX: MSB) share price is down 2% to $3.48. This appears to have been driven by profit taking after a strong rebound in the Mesoblast share price on Monday. The biotech company’s shares have been very volatile since the FDA rejected its remestemcel-L application pending further trials.

The Temple & Webster Group Ltd (ASX: TPW) share price has fallen 4% to $11.74 despite there being no news out of the online furniture retail company. However, with the Temple & Webster share price up 360% year to date prior to today, I wouldn’t be surprised if some of this decline is related to profit taking from investors.

More reading

• ASX 200 jumps 2.6%, big 4 banks surge
• Why the Mesoblast (ASX:MSB) share price jumped 14% higher today
• These were the worst performing shares on the ASX 200 last week
• ASX 200 drops, Trump has COVID-19, Mesoblast (ASX:MSB) share price sinks
• Why Beach, Fortescue, Mesoblast, & SeaLink shares are tumbling lower

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The Telix Pharmaceuticals Ltd (ASX: TLX) share price has been a strong performer on Tuesday.

In morning trade the clinical-stage biopharmaceutical company’s shares jumped 8% to $1.78.

This leaves the Telix share price within sight of its 52-week high of $1.95.

Why is the Telix share price charging higher today?

Investors have been buying Telix’s shares this morning after it announced that the United States Food and Drug Administration (FDA) has granted Orphan Drug Designation (ODD) for 18F-FET for the positron emission tomography (PET) imaging of glioma. This is a type of brain tumour.

According to the release, the granting of this ODD qualifies Telix for various drug development incentives. These may include FDA-administered market exclusivity for seven years, waived FDA prescription drug user fees, and tax credits for R&D and clinical development costs.

What is glioma?

Gliomas comprise a group of primary brain tumours arising from glial cells which surround and support the neurons of the brain.

The company notes that there are over 22,000 cases in the United States each year and represent over 80% of all malignant brain tumours.

Telix’s CEO, Dr Christian Behrenbruch, commented, “PET imaging of the brain is increasingly used to supplement conventional imaging with MRI, which for many years has been the primary clinical imaging modality in patients with glioma at all stages of disease.”

“The granting of an Orphan Drug Designation by the FDA for 18F-FET provides Telix with the option to develop this valuable PET imaging agent commercially, to ensure it is available to patients with glioma across the disease spectrum,” he added.

In addition to this, management notes that 18F-FET is highly suitable for use as a companion diagnostic to TLX101. This is Telix’s therapeutic drug candidate for treating glioblastoma, a highly aggressive form of glioma.

In light of this, Mr Behrenbruch believes “18F-FET’s relevance as a patient selection and therapeutic monitoring tool for TLX101 is particularly beneficial to the Company.”

More reading

• Why Atlas Arteria, Cochlear, Telix, & Treasury Wine shares are dropping lower
• Why Iron Road, Nuchev, Telix, & Treasury Wine shares are pushing higher today
• Telix (ASX:TLX) share price charges higher on FDA update
• 3 exciting small cap ASX healthcare shares to watch

Motley Fool contributor James Mickleboro owns shares of TELIXPHARM DEF SET. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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It looks like land-bound Aussies have found a new way to splurge their holiday budget – and this ASX small cap is reaping the benefits.

The closing of international borders till at least late 2021 means that overseas holidays are off the agenda. It appears that cashed-up Aussies with nowhere to go are indulging in their mid-life fantasies and buying motorcycles.

At least, that’s what I took away from the MotorCycle Holdings Ltd (ASX: MTO) profit update released today.

MotorCycle share price revving up

The motorcycle dealership said its first half FY21 earnings before interest, tax, depreciation and amortisation (EBITDA) will be “in excess of $20 million”.

This compares to its 1HFY20 EBITDA of $10.4 million and its 2HFY20 figure of $10.3 million.

The news sent the MotoCycle share price surging 22.5% to a two-year high of $2.45 in early trade.

Can the MTO share price sustain momentum?

It seems the group has also benefited from the federal government’s JobKeeper wage supplement and cost cutting to deal with COVID-19.

But before investors get too excited, management included a warning to its bullish update.

“Given the exceptional circumstances, care should be taken using this year’s results as a guide for future performance,” it said in its ASX release.

ASX small cap in the fast lane

Investors though aren’t quite listening and if the MotoCycle share price closes around the current level, it would have gained 21% since the start of 2020.

That puts it only a tat behind the Carsales.Com Ltd (ASX: CAR) share price at 28%, but well ahead of the Autosports Group Ltd (ASX: ASG) and Eagers Automotive Ltd (ASX: APE) share price, which are wallowing in the red.

In contrast, the S&P/ASX 200 Index (Index:^AXJO) shed 14% of its value over the same period.

Another ASX small cap COVID winner

But the MTO share price isn’t the only small cap retailer zooming ahead this morning. The Baby Bunting Group Ltd (ASX: BBN) share price surged 6.5% to $4.89 after it too released a bullish update.

The baby products retailer told investors that its going gangbusters. Margins are expanding and same store sales have jumped 17% since the start of the June 30 financial year, reported the Australian Financial Review.

Excluding locked-down metro Melbourne, same store sales are up 28.5% while click and collect sales surged 233%.

Who said a crisis only brings bad news?

More reading

• Baby Bunting (ASX:BBN) share price on watch after very strong Q1 sales growth
• Why now is a great time to buy ASX shares
• 5 things to watch on the ASX 200 on Tuesday
• Altium (ASX:ALU) updates market on restructure
• The latest ASX small cap buy ideas from leading brokers

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

The Motley Fool Australia has recommended carsales.com Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Both the Northern Star Resources Ltd (ASX: NST) share price and the Saracen Mineral Holdings Limited (ASX: SAR) share price are storming higher on Tuesday morning.

At the time of writing the Northern Star share price is up 5% to $14.55 and the Saracen share price is up 8% to $5.65.

Why are these gold miners charging higher?

Investors have been buying Northern Star and Saracen shares this morning after they announced an agreement to undertake a $16 billion merger-of-equals.

According to the release, this merger will create a top 10 global gold company targeting production of 2 million ounces of gold per annum exclusively in tier-1 locations.

The companies also expect the merger to result in significant synergies. A total of $1.5 billion to $2 billion in unique pre-tax synergies are forecast from the merger. This is via the consolidation of their KCGM ownership, optimisation of processing throughout the broader Kalgoorlie and Yandal regions, and other savings over a ten-year period.

As part of the agreement, Northern Star will acquire 100% of the shares in Saracen for 0.3763 Northern Star shares for each Saracen share held. Based on Monday’s Northern Star share price, this equates to $5.20 per share.

Saracen will also pay a special, fully franked dividend of A3.8¢ per share, conditional on the scheme becoming effective and banking consents.

The scheme is unanimously recommended by the board of Saracen, subject to no superior proposal emerging and the independent expert concluding that it is in the best interests of shareholders.

“An abundance of value.”

Northern Star’s Executive Chair, Bill Beament, believes the merger will create a lot of value for both sets of shareholders.

He commented: “Northern Star has only ever pursued growth when it will create value for shareholders, and this merger-of-equals will create an abundance of value for both Northern Star and Saracen shareholders.”

“This is significant value-creating M&A. Our position as joint venture partners at KCGM, the close proximity of the majority of the combined company’s assets and a host of other synergies makes this a unique opportunity exclusive to Saracen and Northern Star shareholders,” he added.

This sentiment was echoed by Saracen’s Managing Director, Raleigh Finlayson, who will lead the merged entity.

He said: “The benefits which will flow to Saracen shareholders from this merger are significant. The pre-tax synergies alone are expected to be worth in the order of A$1.5 to A$2.0 billion over the next 10 years.”

“Saracen shareholders will own 36.0% of the combined group and therefore share in the significant benefits of these synergies, which is value that would not have been available to our shareholders otherwise. It is difficult to foresee anything like that reduction in our cost base outside of this merger,” the managing director added.

Mr Finlayson notes that this is one of the most logical mergers in mining industry history.

He concluded: “This is one of the most logical and strategic M&A transactions the mining industry has seen. The savings, the synergies and the growth opportunities it will generate make the transaction extremely compelling. In short, it is a unique opportunity for Saracen shareholders unlikely to be replicated via any other avenue.”

More reading

• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 down 1.1%: Corp Travel Management surges higher, gold miners rise, Santos given approval
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The BHP Group Ltd (ASX: BHP) share price is trading lower on Tuesday after announcing a sizeable oil investment.

At the time of writing, the mining giant’s shares are down 0.25% to $36.05.

What did BHP announce?

This morning the mining giant announced that it has signed a membership interest purchase and sale agreement with Hess Corporation to acquire an additional 28% working interest in Shenzi.

Shenzi a six-lease development in the deepwater Gulf of Mexico.

Prior to the agreement, the development was structured as a joint ownership, with BHP owning a 44% interest, Hess holding a 28% interest, and Repsol SA owning the remaining 28% interest.

Should the agreement complete successfully, BHP’s working interest would increase to 72% and immediately add approximately 11,000 barrels of oil equivalent per day of production.

What is BHP paying?

According to the release, BHP and Hess have agreed a purchase price of US$505 million. This remains subject to customary pre and post-closing adjustments.

Management notes that the transaction is consistent with its strategy of targeting counter-cyclical acquisitions in high-quality producing or near producing assets.

And while the company acknowledges that oil prices are at low levels at present because of the pandemic, it continues to believe the fundamentals for oil and advantaged gas will be attractive for the next decade and beyond.

BHP’s President of Petroleum Operations, Geraldine Slattery, commented: “This transaction aligns with our plans to enhance our petroleum portfolio by targeted acquisitions in high quality producing deepwater assets and the continued de-risking of our growth options.”

“We are purchasing the stake in Shenzi at an attractive price, it’s a tier one asset with optionality, and key to BHP’s Gulf of Mexico heartland. As the operator, we have more opportunity to grow Shenzi high-margin barrels and value with an increased working interest,” she added.

More reading

• Top brokers name 3 ASX dividend shares to buy today
• Brokers name 3 ASX shares to buy right now
• Why BHP, Paradigm, Reliance, & SeaLink shares are charging higher today
• Will the Fortescue (ASX:FMG) share price outperform in 2021?
• Is the run over for ASX lithium shares after Tesla’s battery day? 

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The BNPL sector is becoming an increasingly crowded space as banks, online payment behemoths and competitors scramble for market share. One could argue that the likes of Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) may have already priced in recent geographic expansions, and additional capital raisings might be needed to fund further growth initiatives. While BNPL shares could continue to grow, here is one ASX tech share in the payments space that often goes by unnoticed. 

Pushpay Holdings Ltd (ASX: PPH) 

Pushpay has been a quiet overachieving ASX tech share in light of BNPL stocks that tend to take the limelight. The company provides a donor management system including donor tools, finance tools and a custom community app to the faith sector, non-profit organisations and education providers in the US, Canada, Australia and New Zealand. 

FY20 performance 

Pushpay delivered solid revenue growth with expanding operating margins and operating cash flow improvements in FY20. The company completed the strategic acquisition of Church Community Builder, a US-based, leading provider of church management systems for a total cash consideration of US$87.5 million. It achieved or exceeded all guidance provided to the market over the year, including operation revenue, gross margin and total processing volumes. 

The company is making a significant step towards profitability with operating cash flow increasing 953% to US$23.5 million up from negative US$2.8 million. Likewise, its net profit after tax significantly increased to US$16 million from a loss of US$1.4 million in FY19. Its previous financial year included a one-time benefit arising from previously unrecognised tax losses and deferred research expenditure of US$20.9 million which contributed to the net profit of US$18.8 million in FY19. Excluding the benefit would result in the loss of US$1.4 million in FY19. 

COVID-19 has served as a tailwind for the digital business as client services move online. The company provided an earnings before interest, tax, depreciation, amortisation and fair value adjustments (EBITDAF) of between US$50.0 million and US$54.0 million. This would represent an increase of more than 100% on the prior corresponding period. 

Why Pushpay could be a leading ASX tech share

The shift to digital apps within the faith sector, non-profit organisation and education space has seen an uplift in demand for Pushpay services. The company has already provided an outlook that EBITDAF would more than double against the prior corresponding period and has already transitioned into a profitable business. This is arguably a step ahead of many ASX tech shares, especially the likes of BNPL shares that could be years away from being cash flow positive businesses. 

More reading

• Could the Zip share price be ready to have a crack at $10 again? 
• Why now is a great time to buy ASX shares
• Afterpay vs Zip, which is the better investment?
• You could become very wealthy by investing $1,000 into these ASX shares
• 5 things to watch on the ASX 200 on Monday

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The Baby Bunting Group Ltd (ASX: BBN) share price will be on watch on Tuesday after the release of a trading update ahead of its annual general meeting.

How is Baby Bunting performing?

When Baby Bunting released its full year results in August, it revealed that its comparable store sales growth for the first six weeks of FY 2021 was 20%.

Pleasingly, this morning the company revealed that this strong form has continued into October.

According to its update, Baby Bunting’s financial year to date comparable store sales growth to 2 October was 17%. These figures include its stores in the Melbourne metropolitan region, which have been impacted by lockdowns.

Excluding these stores, Baby Bunting’s comparable store sales growth would have been an impressive 28.5% over the same period.

A key driver of this growth has been the company’s online business. During the first quarter of FY 2021, Baby Bunting’s online sales (including click and collect) were up 126% on the prior corresponding period. Excluding the Victoria region, online sales growth was 92% during the first quarter.

Click and collect has proven to be increasingly popular with consumers in FY 2021. Management advised that click and collect sales grew 233% during the first three months of the financial year.

The positives don’t stop there. The company’s gross margin has continued to widen in FY 2021. At the end of the first quarter, Baby Bunting’s gross margin stood at 37.5%. This compares to a gross margin of 36.2% in FY 2020.

One potential negative is that COVID-19 has impacted the company’s operating costs.

It commented: “We have also seen an increase in COVID-19 related costs, whether that be direct costs such as cleaning and general operating costs. But there has also been increased costs due to channel switching and impacts on the supply chain in relation to freight, storage and handling.”

However, it chose not to quantify this statement, so investors may need to wait until its half year results in February to see where its operating margins stand.

In line with the outlook given with its full year results in August, Baby Bunting expects to open 4 to 6 new stores in FY 2021. Though, no full year earnings guidance has been provided due to the uncertain operating environment.

More reading

• Fund managers have been buying Kogan (ASX:KGN) and this ASX share
• All-time high! Here’s why the Baby Bunting (ASX:BBN) share price is soaring today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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The Zip Co Ltd (ASX: Z1P) share price came crashing down as fast as it went up. In a matter of just 15 trading sessions it climbed from $6.70 to $10.50 and back to $6.70 again. With the PayPal fears behind us, could the Zip share price be ready to have a crack at $10 again? 

Paypal fears forgotten 

The reason for the initial broad BNPL sell off was due to PayPal launching a very similar product. This product will allow customers to pay for a purchase in four instalments over a six-week period, without being charged interest. The key advantage for PayPal is its existing network of more than 26 million merchants and 324 million users. The company has the capability to quickly and easily introduce its product offering to a much bigger audience at a potentially cheaper fee to merchants. Its impact on Zip is yet to be known, but nonetheless a potential risk for Zip’s growth in the US. The PayPal fears combined with a broader sell off of tech shares saw the Zip share price sink almost 50% from recent peak to trough. 

Is the Zip share price a buy? 

The market is expected to continue in a volatile fashion leading into the US election and COVID-19 related fears. I believe investors could take advantage of the potential volatility to come as an opportunity to buy Zip shares at a cheaper price. 

Notwithstanding the risks to the broader market, the Zip share price does appear to have found a bottom and starting to grind higher. I believe further catalysts and news will be needed for the Zip share price to have another crack at the $10 mark. So what could investors look forward to? 

Firstly, the federal budget will be announced today with anticipated immense spending across all sectors of the economy to boost activity and underpin employment. The government hopes that bringing forward income tax cuts will lead to additional spending to kickstart the economy. This is likely to be good news for retail-related sectors including Zip. 

Additional business updates particularly regarding its Quadpay performance will be key in reaffirming investors that PayPal is not a significant threat. Zip had previously updated the market on 24 August of Quadpay’s record performance and growth. This update highlighted record monthly translation volume in excess of US$70 million in July, representing a 30% increase on the June quarter average and a 600% increase year on year. It added an additional 133,000 customers in July and surpassed the 2 million customer milestone in August. It does appear that the momentum is building the Quadpay. 

Foolish Takeaway

A positive US market update and continued international expansion will be key for the Zip share price to have a crack at its recent record all-time high. I would prefer to be buying at a cheaper price for better risk/reward, and the current market volatility could offer that window of opportunity for those that believe in the Zip growth story. 

More reading

• Why this ASX tech share could be better than BNPL stocks 
• Afterpay vs Zip, which is the better investment?
• These were the best performing shares on the ASX 200 last week
• The Zip (ASX:Z1P) share price crashed 33% lower in September
• These were the worst performing ASX 200 shares in September

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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