SEZL's Merchant Acquisition Strategy Vital for Its Growth Trajectory

Sezzle’s SEZL merchant acquisition strategy has evolved. Firstly, the company has moved away from a volume-based approach and is prioritizing enterprise-level merchants, indicating a focus on quality over quantity.

While historical data may reveal a higher merchant count, SEZL’s current strategy of targeting large-scale merchants and expanding into new, less populated categories for Buy Now Pay Later adoption, such as grocery bills, is significantly more effective. The success of this targeted approach translates into securing higher-value relationships that contribute more to Sezzle’s gross merchandise volume (GMV).

In the first quarter of 2025, SEZL signed SCHEELS, a midwestern sporting goods store, and WAP.com, a social commerce platform. Although these new signings did not inflate the number of total merchants exponentially, they did add to the company’s GMV, increasing 64.1% year over year, thus contributing to the year-over-year top-line upsurge of 123.3%.

In addition to refining its merchant acquisition strategy by pursuing enterprise-level merchants, a banking partnership with WebBank has been crucial in realizing the full benefits of this strategy. Sezzle disclosed its five-year-long partnership with WebBank in the third quarter of 2024 earnings. This collaboration provides an edge to Sezzle in merchant acquisition, as it serves more streamlined and attractive terms.

By partnering with WebBank, SEZL is operating under a unified regulatory framework, which reduces regulatory burden for merchants. Furthermore, WebBank, via Sezzle’s marketing efforts, offers loans to U.S. customers to finance purchases of merchant products via the company’s platform or its direct merchant network. This plan exudes the reliability and scalability of payment solutions to the merchants, boosting confidence that the company can support their growth and demand.

The combination of a robust infrastructure and simplified compliance makes Sezzle a no-brainer for merchants seeking to integrate a seamless BNPL option, bolstering the company’s ability to acquire high-quality partners.

SEZL’s Price Performance, Valuation & Estimates

The stock has skyrocketed a whopping 923.7% in the past year, significantly outperforming Green Dot GDOT, FirstCash FCFS and the industry as a whole. The industry has rallied 26.7%, whereas Green Dot and FirstCash have gained 6.8% and 19.5%, respectively.

1-Year Price Performance

From a valuation standpoint, SEZL trades at a forward price-to-earnings ratio of 38.69, above Green Dot’s 7.5, FirstCash’s 15.2 and the industry’s 22.91.

Sezzle has a Value Score of F.

The Zacks Consensus Estimate for SEZL’s earnings for 2025 has risen 47.5% over the past 60 days.

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

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

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