Zip Co Limited (ASX:ZIP) had been showing signs of a potential breakout, leading into today, before bumping into some resistance to the move at A$3.21 and making an about turn. As of today’s close, ZIP shares are trading at A$3.03, marking a 5.61% decrease on the day, with a retest of A$3.00. Despite today’s drop, the shares have gained 56.19% over the past month of trading, moving the stock into overbought territory.
ZIP’s recent success is underpinned by several key factors. A full-year earnings upgrade announced on June 11, 2025, projecting cash earnings before tax, depreciation, and amortization (EBTDA) of at least $160 million for FY 2025, aided a 19% jump in the share price.
This revision was largely attributed to strong performance in the U.S. market, where Total Transaction Volume (TTV) growth exceeded 40% year-on-year. Furthermore, the company’s strategic $50 million share buyback program, initiated in April 2025, boosted investor sentiment, resulting in a 20% share price increase. These initiatives reflect Zip’s commitment to enhancing shareholder value and signal a strong financial position.
Technically, ZIP’s current price is well above its 50-day (1.95 AUD) and 200-day (2.48 AUD) moving averages, indicating strong recent momentum. However, the Relative Strength Index (RSI) of 75.93 suggests the stock is currently overbought, which could trigger a short-term correction.
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Despite these positive signs, Zip remains unprofitable, reporting a net loss of 46.37 million AUD over the last 12 months, with a loss per share of -0.04 AUD. While revenue for the last 12 months reached 951.74 million AUD, the path to sustained profitability remains a key focus for investors.
Zip Co had been displaying strong momentum and technical indicators that suggest a breakout was the target, with shares up 114.89% in 12 months. However, today’s move could be indicative of some near term profit taking, resistance being found, overbought conditions, and the company’s current lack of profitability.
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