SEZL Surges 128% in 6 Months: Can Investors Still Buy?

Sezzle Inc. Stock Surpasses Industry Peers with Impressive Growth

Sezzle Inc.’s stock, SEZL, has experienced a remarkable surge, climbing 127.9% over the past six months. This impressive performance far outpaces the industry’s modest growth and the 17.5% increase in the Zacks S&P 500 Composite. In comparison, FirstCash (FCFS) and Mastercard (MA) saw growth of 25% and 9.1%, respectively. The year-to-date price performance further highlights SEZL’s dominance, with a 109.4% increase, significantly outpacing FirstCash’s 41.2% and Mastercard’s 10.2% growth.

Investors are now questioning whether this rally is still worth joining.

On-Demand: A Catalyst for Sustained Revenue Growth

Sezzle’s On-Demand initiative has played a pivotal role in its recent success. Starting with 707,000 Monthly On-Demand & Subscribers (MODS) in the fourth quarter of 2024, the company faced a 7% year-over-year decline in MODS during the first quarter due to seasonal factors. However, this dip was temporary, as the company recorded a 14% year-over-year increase in MODS to 748,000 by the June-end quarter. This growth was driven by targeted marketing efforts.

The growing popularity of On-Demand led to a 74.2% year-over-year increase in gross merchandise volume (GMV) in the second quarter of 2025. It also boosted customer purchase frequency from 4.8 times to 6.1 times. This high level of engagement contributed to a 76.4% year-over-year increase in revenue, showcasing the scalability of Sezzle’s business model.

Despite a 50.4% rise in non-transaction-related operating expenses, primarily due to increased marketing costs, Sezzle’s operating margin expanded by 680 basis points to 36.6% in the June-end quarter. This improvement positions the company well to leverage its scalable cost structure to support the continued growth of On-Demand, driving long-term revenue expansion.

In recent earnings discussions, CEO Charlie Youakim highlighted that MODS have a strong lifetime value, ensuring recurring revenue. This characteristic reinforces Sezzle’s ability to maintain consistent revenue growth over time.

Strong Profitability and Solid Liquidity Position

On the profitability front, Sezzle’s return on equity (ROE) and return on invested capital (ROIC) have consistently exceeded industry averages. With a current ROE of 102.9%, which is significantly higher than the industry average of 50.6%, and a ROIC of 58.2%, well above the industry’s 22.7%, the company’s business model demonstrates a strong potential for maximizing shareholder value.

Sezzle also maintains an impressive liquidity position. Its current ratio stands at 3.51, surpassing the industry average of 1.17. Over the past few quarters, this metric has shown consistent improvement, thanks to increasing short-term assets. A current ratio above 1 provides Sezzle with substantial flexibility to meet short-term obligations.

Positive Outlook for Top and Bottom Lines

Analysts remain optimistic about Sezzle’s future performance. The Zacks Consensus Estimate for SEZL’s 2025 sales is projected at $442.1 million, representing a 63.1% year-over-year increase. For 2026, a 28.4% growth is anticipated. Earnings per share (EPS) for 2025 are expected to reach $3.27, reflecting a 77.7% year-over-year increase, with a 32.1% rise projected for 2026.

Over the past 60 days, there have been upward revisions for both 2025 and 2026 EPS estimates, with no downward adjustments. These positive changes reflect analysts’ confidence in Sezzle’s growth trajectory.

Recommendation to Investors

The rising demand for Sezzle’s On-Demand service is driving GMV and enhancing customer purchase frequency. As the company continues to expand its operating margin, it is well-positioned to improve product offerings and sustain revenue growth. The recurring nature of MODS ensures long-term stability.

Sezzle’s financial health remains robust, with strong ROE and ROIC figures and a current ratio exceeding 1, indicating solid liquidity. Analysts are optimistic about the company’s top and bottom-line performance, with upward EPS revisions highlighting their confidence.

Given these factors, investors are encouraged to consider adding Sezzle to their portfolios. With its strong fundamentals and promising outlook, SEZL presents a compelling opportunity in the fintech sector.