Is SEZL's On-Demand a Much-Needed Catalyst for Long-Term Growth?

Sezzle’s SEZL introduction of On-Demand is a display of its product diversification tactic that has been a cornerstone in fueling user engagement, driving the top line and gross merchandise volume (“GMV”). This product, rolled out in October 2024, is a testament to the company’s ability to look past being just a merchant-integrated buy now, pay later solution.

Diving into SEZL’s history, we find that its growth is linked to the network of partnered merchants. Despite the success of this model, a major drawback was that customers could only use Sezzle at a merchant that was explicitly partnered with it. This negative was then offset by the launch of “Sezzle On-Demand,” which gained traction post-WebBank partnership during the fourth quarter of 2024.

This product granted users the flexibility to Pay-in-4 wherever Visa is accepted. The strategy acted like a charm in terms of freeing up customers from the constraints of its direct merchant partnership, morphing the company into a BNPL anywhere solution.

To assess the success of this product, the company introduced a new metric, Monthly On-Demand & Subscribers (“MODS”). The company had 707,000 MODS at the end of the December quarter in 2024, which then dropped to 658,000 during the first quarter of 2025. This decline is consistent with seasonal trends following the holiday shopping period, which is why we anticipate the metric to boom in the upcoming quarters.

Sezzle saw a sharp increase in user engagement and GMV, driven by the product's expanded utility. An improvement in user engagement was shown by the rise in customer purchase frequency to 6.1 times in the recent March-end quarter, up from 4.5 times in the same quarter last year. The rapid growth in revenues, which increased 123.3% year over year in the first quarter of 2025, and GMV, which rose 64.1%, are strong signs that On-Demand is a successful product diversification strategy, resulting in greater user stickiness and fueling substantial financial performance.

SEZL’s Price Performance, Valuation & Estimates

The stock has skyrocketed 918.2% in the past year, significantly outperforming Paysafe Limited PSFE and Paysign PAYS, along with the industry as a whole. The industry has rallied 28.8%. Paysafe Limited has lost 27.2%, while Paysign has surged 88.2% for the same period.

1-Year Price Performance

From a valuation standpoint, SEZL trades at a forward price-to-earnings ratio of 39.31, up from Paysafe Limited, Paysign and the industry’s 5.29, 18.91 and 22.76, respectively.

P/E - F12M

Sezzle has a Value Score of F.

The Zacks Consensus Estimate for SEZL’s earnings for 2025 is pegged at $3.26 per share, indicating a 77.2% surge from the year-ago quarter's actual.

SEZL currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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