Zip CoASX:ZIP +3.51%62 Interest Coverage is 1.54 as of Dec. 2025, which is 133% above its 10-year median of 0.66. 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 164 Credit Services companies, Zip Co ranks worse than 90.85% on this metric.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's
Operating Income
by its Interest Expense. Zip Co's
Operating Income
for the
six
months ended in Dec. 2025 was A$174 Mil. Zip Co's Interest Expense for the
six
months ended in Dec. 2025 was A$-113 Mil.
Zip Co's interest coverage for the quarter that ended in Dec. 2025 was 1.54.
The higher the ratio, the stronger the company's financial strength is.
Warning Sign:
Ben Graham prefers companies' interest coverage to be at least 5. Zip Co Ltd interest coverage is 1.49, which is low.
The historical rank and industry rank for Zip Co's Interest Coverage or its related term are showing as below:
ASX:ZIP'
s Interest Coverage Range Over the Past 10 Years
Min: 0.01 Med: 0.66 Max: 1.49
Current: 1.49
ASX:ZIP's Interest Coverage is ranked worse than 90.85% of 164
companies
in the Credit Services industry
Industry Median: 49.41
vs ASX:ZIP: 1.49
Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.
Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .
Zip Co Interest Coverage Related Terms
Zip Co Interest Coverage Historical Data
* Premium members only.
The historical data trend for Zip Co's Interest Coverage 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.
Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.
ASX:ZIP vs V, MA, AXP: Interest Coverage Comparison
For the Credit Services subindustry, Zip Co's Interest Coverage, along with its competitors' market caps and Interest Coverage 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 Interest Coverage vs Credit Services Industry
For the Credit Services industry and Financial Services sector, Zip Co's Interest Coverage distribution charts can be found below:
* The bar in red indicates where Zip Co's Interest Coverage falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
* 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.
Zip Co (ASX:ZIP) has a Interest Coverage of 1.54 as of Dec. 2025. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on Zip Co and its competitors. This is 133% above median its historical median of 0.66. Over the past decade, Zip Co's Interest Coverage has ranged from 0.01 to 1.49. According to the industry distribution chart, Zip Co ranks #149 out of 164 companies in the Credit Services industry, placing it in the top 90.9%.
Is Zip Co's Interest Coverage too high?
Zip Co's current Interest Coverage of 1.54 is 133% above median its 10-year median of 0.66. Over the past 10 years, this metric has ranged from a low of 0.01 to a high of 1.49. The Credit Services industry median Interest Coverage is 49.41. Zip Co's value of 1.54 is 96.9% below this industry median. Based on the distribution chart, Zip Co ranks #149 out of 164 companies in the Credit Services industry, which is in the bottom quartile relative to peers. 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 Interest Coverage compare to V and MA?
According to the Credit Services industry distribution chart, Zip Co ranks #149 out of 164 companies for Interest Coverage. This places Zip Co in the lower half of its industry. The industry median Interest Coverage is 49.41. Zip Co's value of 1.54 is 96.9% below this benchmark. Historically, Zip Co's own Interest Coverage has ranged from 0.01 to 1.49 over the past decade. While the company's 10-year median is 0.66 vs. the industry median of 49.41, Zip Co has consistently been below 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 Interest Coverage for a Credit Services company?
The median Interest Coverage among Credit Services companies is 49.41, based on 164 companies in the industry. Companies in the top quartile (top 25%) have a Interest Coverage significantly above this median, while those in the bottom quartile fall well below. However, Interest Coverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Zip Co's current Interest Coverage of 1.54 is 96.9% below 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 Interest Coverage mean?
A high Interest Coverage can signal that a stock is expensive relative to its fundamentals. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on Zip Co and its competitors. For the Credit Services industry, the median Interest Coverage is 49.41 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Zip Co's current Interest Coverage is 1.54, which is 133% above median its own 10-year median of 0.66. 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 Interest Coverage is 1.54, which is 133% above median its 10-year median of 0.66 and 96.9% below the Credit Services industry median of 49.41. 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 Interest Coverage calculated?
Interest Coverage is calculated from a company's financial statements. For Zip Co (ASX:ZIP), the current Interest Coverage is 1.54 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:
Interest Coverage: 1.54 (133% above median its 10-year median of 0.66)
GF Value™: A$2.07 vs. price of A$3.24 (56.5% above fair value)
Industry Position: 96.9% below the Credit Services median (#149 of 164)
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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