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Zip (ASX:Z1P) share price drops after investor presentation

The Zip Co Ltd (ASX: Z1P) share price is dropping after giving an investor presentation to investors.

Zip is one of the biggest buy now, pay later operators on the ASX. The only one bigger is Afterpay Ltd (ASX: APT).

Zip’s presentation

The BNPL ASX share released a monster 58-page presentation to investors.

This gave the business an opportunity to boast about how it’s doing and where it’s going in time.

Management noted that the business continues to generate a lot of growth. In FY21 it saw its total transaction volume increase from $2.1 billion to $5.8 billion. The presentation also boasted about the strong gains of the Zip share price to the benefit of shareholders.

Zip pointed out that it has a flywheel ecosystem, where it brings customers and merchants together for “fair and valued payment experiences”. For consumers, it wants to be their digital wallet. For merchants, it wants to be a single solution and offer things like demand generation, analytics and insights.

What it’s planning to do next

The business pointed to a number of areas where it plans to expand including a physical card, a savings account, being a credit builder, offering rewards and being involved with crypto.

When talking about the card, Zip said the card would be a ‘pay in 4’ card. It showed marketing material that users could earn up to 3% in cashback in rewards every time a card is used in-store. The card can be used anywhere Visa is accepted, even when Apple Pay isn’t.

The credit builder tool will get access to the bank account used to pay bills. Zip said users could get instant credit on bills like the phone, utilities and popular streaming services.

Zip also said that people will be able to “buy, hold, sell – and pay with crypto”. There will also be crypto rewards – “earn up to 3% Bitcoin back on your purchase” was part of the marketing.

Other Zip initiatives include long duration, express checkout and a single global integration.

Summary thoughts on the Zip share price

The US continues to be its highest priority, but it is expanding in places like Canada, Mexico, South Africa and Philippines. It’s also planning to expand into Europe and Asia.

Management believe the future is bright with new revenue streams, profitability and growth in its enterprise/underlying value. It’s targeting $40 billion and then $80 billion of total transaction value in the coming years.

Zip also pointed out that between FY18 to FY21, its cash gross profit has gone up seven times, whilst the cash operating expenditure has also gone up three times in the same timeframe.

Whilst Zip continues to grow strongly, the Zip share price has actually dropped by around 20% over the last six months.

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At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.

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