Sezzle Inc. (SEZL): A Bull Case Theory

We came across a bullish thesis on Sezzle Inc. on R. Dennis’s Substack’s Substack by OppCost. In this article, we will summarize the bulls’ thesis on SEZL. Sezzle Inc.'s share was trading at $70.51 as of January 29th. SEZL’s trailing and forward P/E were 21.71 and 15.55 respectively according to Yahoo Finance.

Sezzle Inc. operates as a technology-enabled payments company primarily in the United States and Canada. SEZL presents a compelling opportunity through a derivative strategy targeting mispriced long-dated volatility. The proposal involves selling 1,000 April 17, 2026, $55 strike put contracts, generating an immediate $950,000 premium and a breakeven price of $45.50, implying a 26% downside cushion. This trade capitalizes on the market’s lingering regulatory fears, which persist despite the CFPB’s May 2025 withdrawal of restrictive interpretive rules, removing a major overhang for the BNPL sector.

Sezzle has pivoted successfully from a transactional BNPL model to a subscription-driven ecosystem, with offerings like “Sezzle Premium” and “Sezzle Up” improving recurring revenue visibility, credit quality, and customer stickiness. Its virtual card solution, “Sezzle Anywhere,” expands the addressable market, turning the platform into a consumer-centric neo-banking wallet, while credit-building incentives create a moat against commoditization.

Financially, Sezzle demonstrates strong growth and profitability, with FY2026 EPS guidance of $4.35 and a breakeven valuation of 10.4x forward earnings, far below peers despite a 67% revenue growth rate and a Rule of 40 score of ~90. The balance sheet is robust, capital turnover is high, and prior share repurchases indicate management confidence.

Structurally, the short-dated loan book and subscription revenue reduce volatility and credit risk, while institutional accumulation and established technical support near $50-$52 enhance the probability of option profitability. Even under moderate assignment scenarios, the trade offers meaningful upside with equity-like returns and limited downside.

Tail-risk can be further mitigated with deep out-of-the-money puts, making this a high-conviction strategy that monetizes regulatory alpha, operational resilience, and mispriced volatility for risk-adjusted gains. This positions investors to capture 17%+ returns with strong downside protection while acquiring exposure to one of fintech’s most structurally advantaged growth stories.

Previously we covered a bullish thesis on Sezzle Inc. (SEZL) by Next’s Substack in May 2025, which highlighted its shift to a profitable fintech model, strong growth, and attractive valuation. The company's stock price has depreciated approximately by 21.74% since our coverage. This is because the thesis didn’t fully play out. The thesis still stands as Sezzle’s subscription model supports resilience. OppCost shares a similar perspective but emphasizes a derivative-based approach.

Sezzle Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held SEZL at the end of the second quarter which was 16 in the previous quarter. While we acknowledge the potential of SEZL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.