Zip Co Ltd (ASX: ZIP) shares closed around 0.5% higher on Thursday afternoon, at $2.07 a piece.
The increase is positive news for investors, but the shares are still trading significantly lower than in January this year.
For the year to date, the ASX financial services shares are now down around 38%, and they're roughly 50% lower than trading levels 12 months ago.
For context, the S&P/ASX 200 Index (ASX: XJO) closed around 0.5% lower on Thursday, but it's around 1% higher year to date.
Now the question is, is the current Zip share price an opportunity to buy the shares for cheap, or is another decline on the horizon.
What has happened to Zip shares so far in October?
The buy now, pay later (BNPL) provider's shares have climbed higher so far this month, up around 3.5% between the 1st of October to the time of writing.
The shares have been driven higher by an announcement out of the company last week. Zip announced last Friday that it will seek shareholder approval at its 2026 AGM on the 19th of November to consolidate its fully paid ordinary shares one to five to one basis.
A share consolidation is viewed positively because it helps to simplify financial paperwork and potentially attract larger investors.
The company also launched an on-market share buyback program of up to $50 million in mid-September to help reduce share price volatility.
Following a steep sell-off earlier this year, it's likely that investors have identified that the shares are now trading at an attractive price.
Should I invest $5,000 into the stock by the end of the month?
Analysts are incredibly bullish on Zip shares, with widespread anticipation that we'll see a significant upside over the next 12 months.
TradingView data shows that all 12 analysts have a buy/strong buy rating on the shares. The average $4.51 target price implies a potential 118% upside ahead, at the time of writing. Although some are confident that Zip shares can climb another 191% to $6.03 over the next 12 months, at the time of writing.
UBS recently renewed its buy rating and $4.70 target price on Zip shares. The broker said that the outlook for the current year was better than expected, providing comfort around the defensive qualities of the buy now, pay later business model through slowing economic times.
The team at Citi also reiterated their buy rating on the shares last month, although they lowered their 12-month target price to $3.20, down from $3.55 previously.
The post Should I invest $5,000 into Zip shares before the end of October? appeared first on The Motley Fool Australia.
Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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