Zip Co Limited Fundamental Analysis
Zip Co Limited (ZIP.AX) shows weak financial fundamentals with a PE ratio of 33.02, profit margin of 8.91%, and ROE of 15.91%. The company generates $1.2B in annual revenue with N/A year-over-year growth of N/A.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 40.7/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ZIP.AX's fundamental strength across five key dimensions:
Efficiency Score
WeakZIP.AX struggles to generate sufficient returns from assets.
Valuation Score
ModerateZIP.AX shows balanced valuation metrics.
Growth Score
ModerateZIP.AX shows steady but slowing expansion.
Financial Health Score
ModerateZIP.AX shows balanced financial health with some risks.
Profitability Score
WeakZIP.AX struggles to sustain strong margins.
Key Financial Metrics
Is ZIP.AX Expensive or Cheap?
P/E Ratio
ZIP.AX trades at 33.02 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, ZIP.AX's PEG of 0.08 indicates potential undervaluation.
Price to Book
The market values Zip Co Limited at 5.41 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 8.22 times EBITDA. This is generally considered low.
How Well Does ZIP.AX Make Money?
Net Profit Margin
For every $100 in sales, Zip Co Limited keeps $8.91 as profit after all expenses.
Operating Margin
Core operations generate 8.45 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $15.91 in profit for every $100 of shareholder equity.
ROA
Zip Co Limited generates $2.74 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Zip Co Limited generates limited operating cash flow of $-8.56M, signaling weaker underlying cash strength.
Free Cash Flow
Zip Co Limited generates weak or negative free cash flow of $-9.64M, restricting financial flexibility.
FCF Per Share
Each share generates $-0.01 in free cash annually.
FCF Yield
ZIP.AX converts -0.28% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
33.02
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.08
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.41
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.85
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
3.83
vs 25 benchmark
Current Ratio
Current assets to current liabilities
788.09
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.16
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.03
vs 25 benchmark
How ZIP.AX Stacks Against Its Sector Peers
| Metric | ZIP.AX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 33.02 | 21.17 | Worse (Expensive) |
| ROE | 15.91% | 649.00% | Weak |
| Net Margin | 8.91% | -765.00% (disorted) | Weak |
| Debt/Equity | 3.83 | 0.90 | Weak (High Leverage) |
| Current Ratio | 788.09 | 891.38 | Strong Liquidity |
| ROA | 2.74% | 14251.00% | Weak |
ZIP.AX outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Zip Co Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
N/A
Industry Style: Value, Dividend, Cyclical
EPS CAGR
N/A
Industry Style: Value, Dividend, Cyclical
FCF CAGR
N/A
Industry Style: Value, Dividend, Cyclical