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Do you still like Zip Ltd (Z1P). Do you think the Senate inquiry into the buy now/pay later industry may result in a re-rating of the company’s market multiple?
A: I prefer Zip (Z1P) to Afterpay (APT). I am at odds with the broker analysts, who now see more upside in Afterpay. According to FN Arena, these are the latest consensus target prices:
Afterpay – target $81.72 (range $28.25 to $106.00), about 9.0% higher than the last price of $74.98
Zip – target $6.75 (range $4.80 to $10.28), about 1.1% lower than the last price of $6.82.
Afterpay has the most to lose if the Senate Committee recommends that customer lending suitability (eg. credit checks) be considered by the provider. That said, in the scheme of things, I really don’t think it is that big an issue.
For Zip, I can’t see the enquiry leading to any re-rating of its multiple. Maybe a short term negative.
