Zip CoASX:ZIP +3.51%62 Gross Margin % is 85.63% as of Dec. 2025, which is 48% above its 10-year median of 57.80. GuruFocus rates ASX:ZIP with a GF Score™ of 62/100 and a GF Value™ of A$2.07 (Significantly Overvalued). The stock has 7 warning signs investors should review. Among 387 Credit Services companies, Zip Co ranks better than 65.37% on this metric.
Gross Margin % is calculated as gross profit divided by its revenue. Zip Co's Gross Profit for the
six
months ended in Dec. 2025 was A$564 Mil. Zip Co's Revenue for the
six
months ended in Dec. 2025 was A$658 Mil. Therefore, Zip Co's Gross Margin % for the quarter that ended in Dec. 2025 was 85.63%.
The historical rank and industry rank for Zip Co's Gross Margin % or its related term are showing as below:
ASX:ZIP'
s Gross Margin % Range Over the Past 10 Years
Min: 37.04 Med: 57.8 Max: 66.93
Current: 65.28
During the past 13 years, the highestGross Margin % of Zip Co was 66.93%. The lowest was 37.04%. And the median was 57.80%.
ASX:ZIP's Gross Margin % is ranked better than 65.37% of 387
companies
in the Credit Services industry
Industry Median: 51.88
vs ASX:ZIP: 65.28
Zip Co had a gross margin of 85.63% for the quarter that ended in Dec. 2025 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Zip Co was 5.00% per year.
Zip Co (ASX:ZIP) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Zip Co had a gross margin of 85.63% for the quarter that ended in Dec. 2025 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Zip Co Gross Margin % Related Terms
Zip Co Gross Margin % Historical Data
* Premium members only.
The historical data trend for Zip Co's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Credit Services subindustry, Zip Co's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Zip Co Gross Margin % vs Credit Services Industry
For the Credit Services industry and Financial Services sector, Zip Co's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Zip Co's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Zip Co (ASX:ZIP) has a Gross Margin % of 85.63% as of Dec. 2025. Gross margin is the ratio of total gross profit to net sales. View historical data on Zip Co and its competitors. This is 48% above median its historical median of 57.80. Over the past decade, Zip Co's Gross Margin % has ranged from 37.04 to 66.93. According to the industry distribution chart, Zip Co ranks #134 out of 387 companies in the Credit Services industry, placing it in the top 34.6%.
Is Zip Co's Gross Margin % too high?
Zip Co's current Gross Margin % of 85.63% is 48% above median its 10-year median of 57.80. Over the past 10 years, this metric has ranged from a low of 37.04 to a high of 66.93. The Credit Services industry median Gross Margin % is 51.88. Zip Co's value of 85.63% is 65.1% above this industry median. Based on the distribution chart, Zip Co ranks #134 out of 387 companies in the Credit Services industry, which is above the industry midpoint. Overall, Zip Co has a GF Score™ of 62/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Zip Co's Gross Margin % compare to V and MA?
According to the Credit Services industry distribution chart, Zip Co ranks #134 out of 387 companies for Gross Margin %. This puts Zip Co in the upper half of its industry. The industry median Gross Margin % is 51.88. Zip Co's value of 85.63% is 65.1% above this benchmark. Historically, Zip Co's own Gross Margin % has ranged from 37.04 to 66.93 over the past decade. While the company's 10-year median is 57.80 vs. the industry median of 51.88, Zip Co has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Credit Services company?
The median Gross Margin % among Credit Services companies is 51.88, based on 387 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Zip Co's current Gross Margin % of 85.63% is 65.1% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Zip Co and its competitors. For the Credit Services industry, the median Gross Margin % is 51.88 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Zip Co's current Gross Margin % is 85.63%, which is 48% above median its own 10-year median of 57.80. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Zip Co stock overvalued right now?
Based on GuruFocus' analysis, Zip Co (ASX:ZIP) is currently considered Significantly Overvalued. The stock's GF Value™ is A$2.07, compared to a current price of A$3.24 — trading 56.5% above its estimated fair value. The current Gross Margin % is 85.63%, which is 48% above median its 10-year median of 57.80 and 65.1% above the Credit Services industry median of 51.88. Zip Co's overall GF Score™ is 62/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Zip Co (ASX:ZIP), the current Gross Margin % is 85.63% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Zip Co (ASX:ZIP) Overvalued in 2026?
Based on GuruFocus' analysis, Zip Co stock appears to be overvalued.
The current stock price of A$3.24 is trading 56.5% above its estimated GF Value™ of A$2.07.
GuruFocus considers Zip Co to be Significantly Overvalued.
Key valuation signals for ASX:ZIP:
Gross Margin %: 85.63% (48% above median its 10-year median of 57.80)
GF Value™: A$2.07 vs. price of A$3.24 (56.5% above fair value)
Industry Position: 65.1% above the Credit Services median (#134 of 387)
No single metric tells the full story. See the ASX:ZIP stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Zip is a credit provider operating two segments: Australia and New Zealand, and the US. Founded in Australia in 2013, it has over 6 million active customers and partners with over 85,000 merchants. In Australia, Zip positions itself as a credit card alternative, with several revolving credit products. Customers can carry the balance over time with a monthly fee and set their own repayment schedule. The US and New Zealand offering is a far more vanilla BNPL offering: Pay-in-4 in New Zealand and Pay-in-Z in the US, where customers pay back in fixed instalments. The US segment is built on the 2020 acquisition of QuadPay and has recently become Zip's largest and fastest-growing segment.
62GF Score
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