Critical Review: Sezzle (SEZL) & The Competition

Sezzle (NASDAQ:SEZL) is one of 342 publicly-traded companies in the “Financial Services” industry, but how does it compare to its peers? We will compare Sezzle to similar businesses based on the strength of its institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Risk and Volatility

Sezzle has a beta of 6.71, indicating that its share price is 571% more volatile than the S&P 500. Comparatively, Sezzle’s peers have a beta of 2.49, indicating that their average share price is 149% more volatile than the S&P 500.

Insider & Institutional Ownership

2.0% of Sezzle shares are owned by institutional investors. Comparatively, 43.2% of shares of all “Financial Services” companies are owned by institutional investors. 43.9% of Sezzle shares are owned by company insiders. Comparatively, 22.1% of shares of all “Financial Services” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Sezzle and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sezzle	0	4	4	1	2.67
Sezzle Competitors	1993	6919	11711	444	2.50

Sezzle currently has a consensus price target of $145.67, indicating a potential upside of 12.03%. As a group, “Financial Services” companies have a potential downside of 1.26%. Given Sezzle’s stronger consensus rating and higher possible upside, equities analysts plainly believe Sezzle is more favorable than its peers.

Profitability

This table compares Sezzle and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sezzle	30.35%	83.48%	37.55%
Sezzle Competitors	-409.63%	-16.14%	-6.10%

Valuation and Earnings

This table compares Sezzle and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Sezzle	$450.28 million	$133.13 million	28.27
Sezzle Competitors	$24.87 billion	$1.08 billion	8.31

Sezzle’s peers have higher revenue and earnings than Sezzle. Sezzle is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Summary

Sezzle beats its peers on 9 of the 13 factors compared.

Sezzle Company Profile

Sezzle Inc. operates as a technology-enabled payments company primarily in the United States and Canada. The company provides payment solution in-store and at online retail stores; and through proprietary payments solution that connects consumers with merchants. It also offers Sezzle Platform that provides a payments solution for consumers that extends credit at the point-of-sale allowing consumers to purchase and receive the ordered merchandise at the time of sale while paying in installments over time; Pay-in-Four, which allows consumers to pay a fourth of the purchase price up front and then another fourth of the purchase price every two weeks thereafter over a total of six weeks; Pay-in-Full that allows consumers to pay for the full value of their order up-front through the Sezzle Platform without the extension of credit; and Pay-in-Two and other alternative installment options, which allow consumer to pay half of the value of their order up-front and the second half in two weeks. In addition, the company provides Sezzle Virtual Card that allows consumers to access the Sezzle Platform in the form of close-end installment loans and shop with merchants that are not integrated with Sezzle; Sezzle Anywhere, a paid subscription service that allows consumers to use their Sezzle Virtual Card at any merchant online or in-store; Sezzle Premium, a paid subscription service that allows its consumers to access large, non-integrated premium merchants; and Sezzle Up, an opt-in feature of the Sezzle Platform. Further, it offers Long-Term Lending through collaboration with third-party lenders and Product Innovation. Sezzle Inc. was incorporated in 2016 and is headquartered in Minneapolis, Minnesota.