We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Sezzle Stock Sees 4-Digit Growth in 2024: Is it Still a Buy?
Read MoreHide Full Article
Sezzle Inc. (SEZL - Free Report) has established itself as one of the most remarkable growth stories in the stock market. As of this writing, the company’s shares have skyrocketed by an impressive 1,111% over the past year, outpacing the industry’s 22.8% growth.
This buy-now-pay-later (BNPL) fintech disruptor has tapped into a lucrative market by offering alternative credit solutions with flexible payment options, particularly appealing to underbanked younger consumers.
Image Source: Zacks Investment Research
SEZL Stock Rises on Unique Innovations
Sezzle's innovative business model is a key driver of its success. While the app allows users to make interest-free installment payments at select partner stores for free, shopping at merchants outside the network incurs a service fee of up to $5.99 per transaction. Alternatively, users can opt for a subscription plan, such as the "Premium" or "Anywhere" tiers, priced between $12.99 and $17.99 monthly, which waives these fees and offers greater shopping flexibility.
The popularity of these subscription services has been evident, with 529,000 active subscribers as of the latest earnings report, a 152% increase year over year. Additionally, subscribers are engaging with the platform more frequently, fueling the stock's meteoric rise and highlighting the company’s ability to lock customers into its ecosystem while cross-selling additional financial products.
In the competitive BNPL market, Sezzle differentiates itself with unique features. For instance, the platform offers consumers a credit reporting option to help build their credit history. Within the app, a gamified loyalty program rewards users with discounts and incentives for regular payments and consistent usage. On the backend, Sezzle leverages AI for advanced underwriting and fraud detection. These innovations have helped the company gain market share over larger competitors like Affirm Holdings (AFRM - Free Report) and Block (SQ - Free Report) with its "AfterPay" offering and privately-held Klarna, thanks to its robust growth trajectory.
SEZL Sheds its Penny Stock Label
Sezzle's rally is driven by solid financial performance rather than speculation or meme stock hype. The company has demonstrated transformational earnings momentum supported by strong fundamentals.
In the third quarter of 2024, Sezzle reported a blowout performance, with net income surging 1,093% year over year and revenues increasing 71%. Adjusted earnings per share (EPS) climbed to $2.92, a significant jump from $0.21 in the same period last year.
Underlying Merchant Sales (UMS), an important metric representing transactions generated by merchants through Sezzle’s platform, reached $660 million in the quarter, reflecting 40.6% year-over-year growth. The company converted 10.6% of UMS into revenue, surpassing the previous all-time high of 10.5% in the second quarter of 2024. The company’s growing scale has reduced costs and expenses as a percentage of its UMS, directly boosting profitability.
Sezzle has raised its full-year outlook. The company now forecasts 2024 revenue growth of 55%, up from its prior estimate of 35% to 40%. Adjusted EPS for 2024 is expected to reach $9.8, a tenfold increase over 2023, significantly higher than the $6.75 guidance issued in the second quarter. For 2025, management has provided an adjusted EPS projection of $12.00, indicating a 22% increase over the prior year’s tally.
SEZL Excels in Liquidity and Profitability
SEZL demonstrates strong liquidity with a current ratio of 2.4 as of the third quarter of 2024, significantly outperforming the industry average of 1.16. This metric, which compares current assets to current liabilities, highlights a company’s ability to meet short-term obligations efficiently. A current ratio above 1 reflects financial stability, indicating that Sezzle has ample resources to cover its liabilities.
Image Source: Zacks Investment Research
Return on equity (ROE) is a profitability metric that evaluates how effectively a company utilizes shareholders' equity to generate earnings. At the end of the third quarter of 2024, SEZL reported an exceptional ROE of 101.2%, more than double the industry average of 48.2%. This impressive figure underscores the company’s efficiency in allocating capital to high-return opportunities. Sezzle’s return on invested capital stood at 45%, significantly higher than the industry benchmark of 21.4%. Together, these metrics highlight Sezzle’s strategic and operational excellence, showcasing its ability to maximize returns from investments.
Image Source: Zacks Investment Research
SEZL's Strong Growth Forecasts Drive Confidence
The Zacks Consensus Estimate for SEZL’s 2024 sales is $249.2 million, reflecting a 56.4% year-over-year growth projection, with sales expected to rise by 33.2% in 2025. The consensus estimate for earnings is set at 9.85 cents per share for 2024, implying substantial 688% year-over-year growth, with an additional 28% increase anticipated in 2025.
Over the past 60 days, one estimate for 2024 and two estimates for 2025 have been revised upward with no downward adjustments. During the same period, the Zacks Consensus Estimate for 2024 earnings climbed 46.8%, while the 2025 estimate rose 24.9%. These upward revisions highlight analysts' growing confidence in Sezzle's ability to enhance its financial performance, driven by its strong business model and robust growth potential.
SEZL Stock: A Strong Buy for Growth
We recommend a buy, given SEZL’s impressive growth, strong financial performance and market share gains in the competitive BNPL space. The company has demonstrated exceptional profitability with a remarkable return on equity well above the industry average. Sezzle’s innovative business model, including its subscription plans and AI-driven features, has fueled subscriber growth and frequent engagement. With strong liquidity, raised guidance, and solid earnings growth, SEZL is well-positioned for continued success. The upward revisions in earnings estimates further reinforce analysts' confidence in Sezzle's growth potential, making it a solid investment opportunity.
Image: Bigstock
Sezzle Stock Sees 4-Digit Growth in 2024: Is it Still a Buy?
Sezzle Inc. (SEZL - Free Report) has established itself as one of the most remarkable growth stories in the stock market. As of this writing, the company’s shares have skyrocketed by an impressive 1,111% over the past year, outpacing the industry’s 22.8% growth.
This buy-now-pay-later (BNPL) fintech disruptor has tapped into a lucrative market by offering alternative credit solutions with flexible payment options, particularly appealing to underbanked younger consumers.
SEZL Stock Rises on Unique Innovations
Sezzle's innovative business model is a key driver of its success. While the app allows users to make interest-free installment payments at select partner stores for free, shopping at merchants outside the network incurs a service fee of up to $5.99 per transaction. Alternatively, users can opt for a subscription plan, such as the "Premium" or "Anywhere" tiers, priced between $12.99 and $17.99 monthly, which waives these fees and offers greater shopping flexibility.
The popularity of these subscription services has been evident, with 529,000 active subscribers as of the latest earnings report, a 152% increase year over year. Additionally, subscribers are engaging with the platform more frequently, fueling the stock's meteoric rise and highlighting the company’s ability to lock customers into its ecosystem while cross-selling additional financial products.
In the competitive BNPL market, Sezzle differentiates itself with unique features. For instance, the platform offers consumers a credit reporting option to help build their credit history. Within the app, a gamified loyalty program rewards users with discounts and incentives for regular payments and consistent usage. On the backend, Sezzle leverages AI for advanced underwriting and fraud detection. These innovations have helped the company gain market share over larger competitors like Affirm Holdings (AFRM - Free Report) and Block (SQ - Free Report) with its "AfterPay" offering and privately-held Klarna, thanks to its robust growth trajectory.
SEZL Sheds its Penny Stock Label
Sezzle's rally is driven by solid financial performance rather than speculation or meme stock hype. The company has demonstrated transformational earnings momentum supported by strong fundamentals.
In the third quarter of 2024, Sezzle reported a blowout performance, with net income surging 1,093% year over year and revenues increasing 71%. Adjusted earnings per share (EPS) climbed to $2.92, a significant jump from $0.21 in the same period last year.
Underlying Merchant Sales (UMS), an important metric representing transactions generated by merchants through Sezzle’s platform, reached $660 million in the quarter, reflecting 40.6% year-over-year growth. The company converted 10.6% of UMS into revenue, surpassing the previous all-time high of 10.5% in the second quarter of 2024. The company’s growing scale has reduced costs and expenses as a percentage of its UMS, directly boosting profitability.
Sezzle has raised its full-year outlook. The company now forecasts 2024 revenue growth of 55%, up from its prior estimate of 35% to 40%. Adjusted EPS for 2024 is expected to reach $9.8, a tenfold increase over 2023, significantly higher than the $6.75 guidance issued in the second quarter. For 2025, management has provided an adjusted EPS projection of $12.00, indicating a 22% increase over the prior year’s tally.
SEZL Excels in Liquidity and Profitability
SEZL demonstrates strong liquidity with a current ratio of 2.4 as of the third quarter of 2024, significantly outperforming the industry average of 1.16. This metric, which compares current assets to current liabilities, highlights a company’s ability to meet short-term obligations efficiently. A current ratio above 1 reflects financial stability, indicating that Sezzle has ample resources to cover its liabilities.
Return on equity (ROE) is a profitability metric that evaluates how effectively a company utilizes shareholders' equity to generate earnings. At the end of the third quarter of 2024, SEZL reported an exceptional ROE of 101.2%, more than double the industry average of 48.2%. This impressive figure underscores the company’s efficiency in allocating capital to high-return opportunities. Sezzle’s return on invested capital stood at 45%, significantly higher than the industry benchmark of 21.4%. Together, these metrics highlight Sezzle’s strategic and operational excellence, showcasing its ability to maximize returns from investments.
SEZL's Strong Growth Forecasts Drive Confidence
The Zacks Consensus Estimate for SEZL’s 2024 sales is $249.2 million, reflecting a 56.4% year-over-year growth projection, with sales expected to rise by 33.2% in 2025. The consensus estimate for earnings is set at 9.85 cents per share for 2024, implying substantial 688% year-over-year growth, with an additional 28% increase anticipated in 2025.
Over the past 60 days, one estimate for 2024 and two estimates for 2025 have been revised upward with no downward adjustments. During the same period, the Zacks Consensus Estimate for 2024 earnings climbed 46.8%, while the 2025 estimate rose 24.9%. These upward revisions highlight analysts' growing confidence in Sezzle's ability to enhance its financial performance, driven by its strong business model and robust growth potential.
SEZL Stock: A Strong Buy for Growth
We recommend a buy, given SEZL’s impressive growth, strong financial performance and market share gains in the competitive BNPL space. The company has demonstrated exceptional profitability with a remarkable return on equity well above the industry average. Sezzle’s innovative business model, including its subscription plans and AI-driven features, has fueled subscriber growth and frequent engagement. With strong liquidity, raised guidance, and solid earnings growth, SEZL is well-positioned for continued success. The upward revisions in earnings estimates further reinforce analysts' confidence in Sezzle's growth potential, making it a solid investment opportunity.
SEZL currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.