Fintech firm Sezzle (SEZL) has enjoyed an impressive financial trajectory, with its stock skyrocketing over 90% in the past month and a remarkable 3337.50% in the last year. The company has posted strong Q3 results, indicating year-over-year revenue growth of 71%. Notably, active subscribers increased by 319,000 from last year, culminating at 529,000 in the most recent quarter. Sezzle has expanded its reach by announcing recent partnerships with online retailers Backcountry and Rural King, embedding its flexible, interest-free financing option into its retail experience.
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The company continues to deploy its unique digital payment platform to equip consumers with options that heighten their purchasing power, making it an intriguing option for investors interested in the next generation of financial technology.
Sezzle Growing Its Reach with Partnerships
Sezzle is a fintech firm that offers interest-free installment plans primarily for young generations via its digital payment platform. The company boosts the financial power of its users by providing them with interest-free payment options both online and in certain physical stores. The company has partnered with three major retail entities: Rural King, Backcountry, and Shoplazza.
Rural King’s patrons can now use Sezzle’s interest-free financing at all 130 of its locations and online. Sezzle offers a wide variety of essential goods. This partnership aims to empower Rural King’s customers to conveniently make everyday purchases.
The partnership between Sezzle and Backcountry, an outdoor gear retailer, was partly driven by Sezzle’s high approval rates, which aligns with Backcountry’s dedication to inclusivity and customer satisfaction.
Lastly, Sezzle’s collaboration with Shoplazza, an e-commerce platform, opens up flexible payment options to thousands of US-based Shoplazza merchants.
Sezzle’s Recent Financial Results
The company recently announced results for Q3 2024. Underlying Merchant Sales (UMS) saw a remarkable increase of 40.6% year-over-year to $659.9 million, surpassing the previous quarter’s record. This was due to increased consumer engagement, which drove the purchase frequency to 5.4 times from 4.1 times during the same period in 2023. Active subscribers reached 529,000, contributing to this revenue growth. Total revenue followed suit, rising by 71.3% year-over-year to $70.0 million, setting another record high for revenue as a percentage of UMS at 10.6%.
Total operating expenses increased by 38.4% to $49.1 million. Yet, the company achieved a 289.6% year-over-year increase in operating income, resulting in a new record high of $20.8 million. Net Income reached $15.4 million with earnings per share (EPS) of $2.92.
As of the quarter’s end, Sezzle had $88.3 million of cash and cash equivalents and an outstanding principal balance of $95.0 million on its $150.0 million credit facility as of the quarter end.
Following the impressive third-quarter earnings report, SEZL’s management has raised its FY2024 guidance, projecting a net income of $71.5 million versus the previous projection of $55.0 million, with adjusted net income per diluted share of $9.80 versus the original estimate of $6.75.
What Is the Price Target for SEZL Stock?
The stock has seen explosive price growth, rocketing over 3300% in the past year. It trades near the higher end of its 52-week price range of $9.75 – $454.16 and shows ongoing positive price momentum by trading above all major moving averages. Its rapid price growth has it trading at a premium to industry peers, with a P/S ratio of 10.26x compared to the Credit Services industry average of 4.95x.
Analysts following the company have been constructive on SEZL stock. For instance, B. Riley analyst Hal Goetsch, a five-star analyst according to Tipranks’ ratings, recently reiterated a Buy rating on the shares while raising the price target to $353 from $163, noting Q3’s substantial results and expectations that Sezzle will continue to grow much faster than the buy now pay later market overall.
Based on two analysts’ most recent recommendations, Sezzle is rated a Moderate Buy overall. The average price target for SEZL stock is $326.50, representing a potential downside of -15.19% from current levels.
SEZL in Summary
Sezzle continues its torrid stock growth following impressive Q3 results and boasting a substantial increase in active subscribers, expanding its consumer base. It recently formed partnerships with online retailers Backcountry and Rural King, alongside a productive collaboration with Shoplazza, and has successfully integrated Sezzle’s interest-free financing options into their retail experiences. SEZL may be an enticing fintech prospect for forward-looking investors.
