Zip Co (ASX:ZIP) Jumps as Firstmac Settlement Lifts Trademark Cloud: Buy or Wait?

Zip Co Jumps After Firstmac Settlement

Zip Co (ASX:ZIP) shares climbed more than 3% to A$2.27 after the buy now, pay later company settled a trademark dispute that had threatened its biggest brand asset, its own name. The settlement removes a cloud that had been hanging over the stock, and for investors, the real question now is whether the relief rally has more room to run.

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Why the Firstmac Settlement Matters

To understand today’s move, you need the back story. On 13 May, the High Court of Australia ruled against Zip Co in a case brought by Firstmac, a non-bank lender that has held a trademark on the “Zip” name since 2004. The ruling ordered Zip to stop using its own brand name in Australia within 28 days.

For any company, being told to rebrand is a serious headache. New names mean marketing costs, customer confusion, and lost recognition built up over the years.

Today, that threat is gone. Zip announced it has reached a settlement with Firstmac and will buy the trademark, meaning it can keep operating as “Zip” in Australia. The terms are confidential, but management made two important points clear: Zip Co has no further liability for damages or costs, and the amount it is paying is not material to the group and does not change its FY26 guidance.

In plain terms: a problem that could have been messy and expensive has been resolved cleanly, with no lasting financial damage. That is why investors bid the shares higher.

The Real Story Is Zip’s US Growth

Here is the part many investors miss. The trademark fight was always an Australian issue, and Australia is no longer where Zip’s growth comes from.

The United States is now Zip’s engine room, generating around 80% of the company’s divisional cash earnings. And that engine is running hot. At the recent Macquarie Conference, Zip reported that US total transaction volume, the total value of purchases made through its platform, grew more than 40% year-on-year in April. Management also reaffirmed its full-year FY26 guidance.

That matters because it tells investors the core business is healthy. The trademark issue was noise; the US growth is the signal.

The Investor’s Takeaway for Zip Co

So, is Zip Co a buy now that the cloud has lifted? The honest answer is that this needs careful thought.

On the positive side, a genuine risk has been removed, the US business is growing strongly, and the shares are far cheaper than they were. Zip has still more than halved since October 2025. For investors comfortable with risk, that combination is worth a closer look.

But there are reasons for caution. Buy now, pay later is a competitive industry, and Zip’s success depends on customers continuing to pay their bills on time. If bad debts rise, the growth story changes quickly. The stock has also already run hard recently, so some of today’s good news may already be priced in.

In our view, the smart approach is to treat the settlement as removing a worry rather than as a reason to rush in. Investors should watch the next quarterly update closely, particularly US transaction volumes and bad-debt levels, as those numbers, not legal headlines, will decide where Zip Co goes from here.