Sydney, February 20, 2026, 17:18 AEDT — Market is done for the day.
- Zip closed at A$1.78 on Friday, slipping another 3.8%—this after tumbling 34% the previous day.
- The buy-now, pay-later player said it plans to kick off an on-market buyback worth as much as A$50 million in early March.
- Investors are juggling a “flat” earnings forecast for the second half with improved margin guidance, even as credit losses tick up.
Zip Co Ltd (ZIP.AX) announced plans on Friday for an on-market share buyback of up to A$50 million, with the program slated to kick off around March 6 and potentially running for as long as 12 months. Chief executive Cynthia Scott called the buyback a show of “confidence in the strength of our balance sheet.” The company noted it’s able to change, halt, or pull the program if needed, with share purchases capped at no more than 5% above the five-day volume-weighted average price (VWAP). (Company Announcements)
Zip shares dropped another 3.78% to finish at A$1.78 on Friday, continuing the slide that kicked in after its half-year update. Thursday’s session wrapped up at A$1.85, off 34.4% for the day. The stock has now tumbled roughly 37% from its A$2.82 close on Wednesday, daily pricing data shows. (Investing.com)
Zip posted cash EBITDA of A$124.3 million for the half-year ended Dec. 31, jumping 85.6% from the previous year, with total transaction volume (TTV) hitting A$8.38 billion. The company bumped up its full-year operating margin outlook to above 18.0% and sees cash EBITDA as a share of TTV topping 1.4%. Still, management flagged that second-half cash EBITDA should be roughly level with the first half. Net bad debts climbed to 1.73% of TTV, up from 1.56% a year ago. The group said its next FY26 third-quarter update lands April 17. (yourir.info)
Zip raised its margin targets, but its second-half flat growth outlook rattled investors, especially with earnings missing forecasts. “Guidance for flat growth in the second half caught investors off guard,” said Marc Jocum, senior product and investment strategist at Global X ETFs. He noted how even minor disappointments can spark sharp moves when the market is zeroed in on earnings and rates. UBS analysts pointed to sluggish U.S. customer growth and a jump in credit losses as major headwinds. (Reuters)
Zip, in its Appendix 3C, disclosed 1,270,683,586 shares outstanding, and flagged a buyback ceiling of up to 92,161,082 shares. Barrenjoey Markets and Third Party Platform will handle the repurchases as brokers. (Company Announcements)
Zip’s on-market buyback would see the company snapping up its own shares on the exchange, reducing the total share count if it carries out the plan. Management could be hinting they believe the stock is undervalued, but this move doesn’t actually shift underlying demand or alter credit risk.
Investors are still mulling that last point. Zip’s earnings growth is accelerating, yet the company is cautioning the market against expecting a second-half cash profit bump.
The company operates in the busy buy-now, pay-later sector, a space where investors keep a close eye on credit performance as households face increased borrowing costs. Its global peers: Block’s Afterpay and Affirm in the U.S. This corner of the market tends to move with changes in funding expenses and patterns in bad debt.
Bulls face a clear risk here. Should net bad debts climb further, or U.S. growth slow down, that “flat second half” scenario might end up looking like wishful thinking, not caution. Plus, a buyback isn’t set in stone — it could be shelved as fast as it’s rolled out.
Traders are eyeing Zip after two choppy days, watching to see if it settles and if there’s any early signal on buyback progress. The next key marker is April 17, when the company delivers its quarterly update. That’s when the market will be scanning for new numbers on U.S. transaction growth and credit losses.
