Sezzle (SEZL), a leader in the 'Buy Now, Pay Later' (BNPL) sector, presents a compelling investment case, earning a 'Strong Buy' rating. Despite its stock experiencing a downward trend, the company's fundamental business metrics indicate robust growth and a strong financial position, outperforming many competitors in terms of valuation and operational efficiency. The current market price appears to offer a significant upside for investors.
In the third quarter, Sezzle demonstrated remarkable financial health, with revenue surging by 67% year-over-year. Net income also saw impressive growth of 72.7%, accompanied by a 150-basis point improvement in its EBITDA margin. These figures highlight Sezzle's ability to not only expand its top line but also enhance its profitability through effective operational management. Such performance underscores the company's strong market position and its capacity to generate value.
While Sezzle recorded higher credit loss provisions, amounting to 3.1% of its Gross Merchandise Value (GMV), it continues to boast the highest take rate in the industry at 11.2%. This, combined with its best-in-class profitability, distinguishes Sezzle from its peers. The BNPL industry is still in its early stages of adoption, suggesting a vast runway for future growth and expansion. Sezzle's strategic positioning and solid financial performance indicate its potential to capture a significant share of this evolving market.
The current market sentiment surrounding Sezzle's stock does not accurately reflect its underlying business strength and future potential. With robust growth, superior profitability, and a promising industry outlook, Sezzle stands out as an attractive investment opportunity in the fintech landscape.
