Sezzle Inc. SEZL will report its fourth-quarter 2024 results on Feb. 25, after market close.

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The consensus estimate for total earnings is pinned at $9.85 cents per share, implying a more than 100% year-over-year rise. The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $249.2 million, suggesting 56.4% growth on a year-over-year basis. There has been no change in analyst estimates or revisions lately.

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SEZL reported an earnings surprise of 228.1% in the third quarter of 2024.

Sezzle Inc. Price, Consensus and EPS Surprise

Sezzle Has Lesser Chance of Q4 Earnings Beat

Our proven model does not conclusively predict an earnings beat for SEZL this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Sezzle has an Earnings ESP of 0.00% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Consumer Base Expansion to Have Been SEZL’s Driver in Q4

We anticipate the top line to have grown on the back of a surge in consumer purchase frequency and a rising number of subscribers. The banking program enables the company to introduce products that serve as a cornerstone in user acquisition and expansion of customer lifetime value.

On the third-quarter 2024 earnings call, management claimed jersey patch sponsorship of the Minnesota Timberwolves as a great awareness strategy for the company. We anticipate this strategy to have improved Sezzle’s top line by raising brand awareness and increasing customer acquisition.

SEZL Stock Soars

Sezzle shares have skyrocketed 153.1% in the past six months, outperforming the 25% rise of its industry and 10.4% growth of the Zacks S&P 500 composite. The company’s industry peers Cantaloupe, Inc. CTLP and EVERTEC, Inc. EVTC have underperformed SEZL. CTLP and EVTC have gained 60.4% and 2% in the past six months, respectively.

Six Months' Price Performance

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Sezzle’s stock is looking cheaper and is currently trading at a trailing 12-month price-to-earnings ratio of 23.2, slightly below the industry’s 25.7X.

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SEZL’s Investment Considerations

Sezzle’s positive customer acquisition strategy drives top-line growth. This growth highlights SEZL’s ability to scale and secure market share in the expanding buy now pay later market. The rising subscriber count hints at a growing consumer demand for the company’s offerings. Sezzle has utilized On-Demand to attract first-time users who do not sign up for subscriptions and convert them into subscribers. This enables the company to improve customer acquisition and retention.

In the third quarter of 2024, SEZL’s revenues surged 71% year over year due to a 41% increase in underlying merchant sales (UMS) and a whopping 167% rise in subscription revenues. Also, the EBITDA margin rose 1370 basis points to 32.2%. The combination of better-than-anticipated results and the launch of a banking program with WebBank led the company to raise its 2024 guidance. A bright financial performance triggering the rise in guidance translates into raising investor confidence.

Add Sezzle to Your Portfolio This Earnings Season

SEZL is witnessing top-line growth driven by swift client acquisition and customer base expansion. The improvement in revenues can be attributed to UMS and subscription-led gains. Product launches, coupled with a raised outlook, are green flags for investors.

These factors position Sezzle for continued success, and we believe the stock price rally will continue to prompt investors to buy SEZL this earnings season.

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