In today’s piece, we will discuss the two ASX-listed companies, Zip Co. Ltd. (AU:ZIP) and AMP Limited (AU:AMP).
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Looking at the data points, we can see that analysts are not bullish on these companies and predict only a modest growth in the share prices. Also, on the TipRanks Smart Score tool, ZIP and AMP have a neutral scores of 1 and 7, respectively.
Here, we have used tools like Stock Screener and Stock Comparison on TipRanks to screen and compare these stocks.
Let’s have a closer look at them.
Zip Co. Limited
Zip is a technology company in the financial domain, serving in Australia, New Zealand, and the U.S. The company operates in the BNPL (buy now, pay later) segment and offers individuals and businesses flexible credit solutions.
Over the last year, the company’s stock has lost almost 60% of its value. Investors are concerned about the company’s ability to generate more cash to drive profitability. On the other hand, the company is confident of generating sufficient cash and restoring its profits by the end of this year.
Recently, analyst Wei-Weng Chen from RBC Capital reiterated his Hold rating on the stock, suggesting an upside of 46.8% from the current trading level. He increased his price target from AU$0.70 to AU$0.80. Chen mentioned the company’s cash position of AU$78.5 million reported in January 2023 is only sufficient for the next 7.5 months.
Jefferies’ analyst Roger Samuel feels “things are pretty tight” within the company and it will be “burning out cash” in the second half of 2023.
Is Zip a Good Investment?
On TipRanks, analysts hold mixed views on the ZIP stock, with a Moderate Sell rating on the whole.
The average price target is AU$0.61, which shows a growth of 11.9% on the current price level.
AMP Limited
AMP is a financial services company offering banking and wealth management solutions in Australia and New Zealand. The company has a customer base of 1.5 million.
The company’s stock has been trading down by 15% in the past three months. The shares were mainly hit after the company’s numbers for 2022 earnings fell short of expectations. The company’s net profits for 2022 fell by 34%, due to market volatility on its AUM and a reduction in its net interest margin in its banking services.
On the bright side, the company is showing some progress in streamlining its business activities and its cost-cutting measures. Moreover, the company also resumed paying dividends after a three-year gap. The final dividend for 2022 was AU$0.025 per share.
UBS analyst Scott Russell is unhappy with the results and commented, “AMP’s core profit drivers have continued to disappoint.” The company missed UBS’ profit forecasts by 10%. UBS has a Sell rating on the stock.
What is the Future of AMP Share Price?
According to TipRanks’ analyst consensus, AMP stock has a Hold rating. The stock has one Buy, three Hold, and one Sell recommendation.
The average price target is AU$1.22, which is 9.02% higher than the current price level.
Conclusion
For ZIP, analysts are not happy with the company’s cash situation, which could further hamper its operations. Moreover, the second half of the year looks difficult at this point.
Similarly, with AMP, the company was not able to impress investors and analysts with its results. The comeback of dividends did provide some relief to income investors.
