ZIP – Base Case iCDS 262bps, Negative Case iCDS 302bps, 2030 5.000% Bond YTW of 9.631%, iYTW of 7.191%, B1 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens, Low Refinancing Need

October 13, 2023

  • Credit markets are materially overstating ZIP’s credit risk with a YTW of 9.631% relative to an Intrinsic YTW of 7.191% and an Intrinsic CDS of 262bps. Furthermore, Moody’s is materially overstating ZIP’s fundamental credit risk with its B1 credit rating six notches below Valens’ IG4+ (Baa1) credit rating.

  • Incentives Dictate Behavior™ analysis highlights mixed signals for credit holders. As a positive, most members of management are material owners of ZIP equity relative to their annual compensation, indicating they may be aligned with shareholders to pursue long-term value creation for the company. Additionally, management has low change-in-control compensation relative to their annual compensation, indicating they may not be incentivized to pursue a takeover or accept a sale of the company, decreasing event risk for creditors.

  • Earnings Call Forensics™ of the firm’s Q2 2023 earnings call (8/8/23) highlights that management sentiment was positive when talking about job seeker visits. Management is confident they saw 46% year-over-year growth in quarterly organic job seeker visits.

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