Wondering Why Zip Co Fell 63%? Here's What The Bears Saw

If you only glanced at Zip Co’s headlines this year, the story might have looked encouraging. Revenue and profit both rose in the latest half, even as net margin slipped. Holding Zip Co over the past year would have meant a 63.2% loss, including dividends. If you had been weighing a position back in October 2025, what clues were already on the table that could reconcile that harsh outcome with the bullish and bearish cases on record at the time?

Zip Co is not the only name tied to this theme. Zero in on 16 top copper producer stocks and compare how each one is priced.

The Two Zip Co Stories Investors Had To Price In

The shares cost A$4.01 at the start of the period, and Zip Co sat between two sharply different stories about where the business could go next.

On the optimistic side, analysts framed a Fair Value of A$4.58, essentially the price implied if their assumptions played out, built on revenue climbing 17.4% a year and profit margin moving to 12.5% over three years.

The cautious view pointed to a Fair Value of A$2.1, anchored in worries over tighter US regulation and funding pressure even though it still assumed margin would rise from a loss to 14.7%.

What The Zip Co Results Put To The Test

Zip Co’s H2 2026 numbers gave the bullish story something real to point to. Revenue moved to A$677.895 million and net income to A$64.031 million, while US partnerships and AI projects deepened the product toolkit. Net margin slipped from 10.1% to 9.4%, so profitability progress remained short of the optimistic case. The evidence cut both ways.

The hinge assumption here was margins catching up with growth. When you look at another lender, check whether rising sales and profit per quarter are matched by a stable or improving net margin.

What Zip Co’s Lower Price Is Asking You To Believe

Zip Co trades at A$1.46 today, far below where it sat a year ago, while the selected Narrative’s Fair Value sits above the current price based on its own assumptions about the business.

The thesis leans on partnerships, technology and younger users to carry volume and margins. For the fall to look like an opportunity rather than a warning, a buyer would need to believe those usage and risk trends can hold or improve as Zip Co scales.

"Improved underwriting and credit risk management, alongside investments in AI and machine learning, have resulted in better credit outcomes and lower bad debts (net bad debts now 1.5% of TTV), which bolster net margins and underpin increasing cash earnings."

One Narrative has put a figure on that disagreement. → See the Narrative with its higher Fair Value, assumptions and all

Looking One Step Beyond Zip

Zip gives you one window into digital credit and spending. It shows what can emerge when rapid sign ups meet tighter funding rules.

Step sideways and you find another player focused on online payments and stored balances. That business concentrates on moving money securely for shoppers and merchants.

Rather than chasing a banking licence, it relies on partner institutions. That keeps its structure lighter while still offering credit lines and transfers.

The open question is how an asset light payments platform adapts if regulators push harder on crypto activity and lending practices together.

That argument has a Narrative and a number behind it. → See the company one Narrative values 43% above its price

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