The trading update was strong, with total transaction volumes increasing by 62%. Second half revenue grew 88%.
However, net bad debts increased to 2.24% at the end of the June quarter.
UBS now believes the risk/reward is unfavourable following the recent rally in the share price and downgrades to Sell from Neutral.
Target is raised to $5.70 from $5.60. The broker notes several short-term risks including uncertainty over the duration of the pandemic, growth in credit risk and the integration risk for Quadpay.
Sector: Diversified Financials.
Target price is $5.70.Current Price is $6.57. Difference: ($0.87) – (brackets indicate current price is over target). If Z1P meets the UBS target it will return approximately -15% (excluding dividends, fees and charges – negative figures indicate an expected loss).