By Stuart Condie
SYDNEY--Shares in Australian installment-payment provider Zip are on course for their largest one-day drop in more than two years after its second-quarter earnings fell short of expectations.
The stock was down by 21% about two hours into Thursday's session after the buy-now-pay-later operator's December-quarter cash earnings missed the average analyst forecast on weaker-than-anticipated revenue margins in its Australia and New Zealand markets.
Zip shares were recently at 2.59 Australian dollars, equivalent to US$1.61. The stock, which last fell as much in July 2022, is on track for its lowest close since October.
The result prompted Citi analyst Siraj Ahmed to remove an upside catalyst watch from the stock. Ahmed was neutral on the stock ahead of Zip's update.
Zip shares rose more than four times in value over 2024 after the company shuttered unprofitable global operations and paid down debt.
It swung to positive cash earnings on an annual basis over the 12 months through June, consistently outperforming analysts' expectations and earning its spot back on Australia's S&P/ASX 200 benchmark stock index.
Investors will likely look unfavorably on the end of the recent string of earnings beats, Ahmed said.
Write to Stuart Condie at stuart.condie@wsj.com
(END) Dow Jones Newswires
January 29, 2025 20:02 ET (01:02 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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