(Asx: SZL) | Sezzel Inc a Buy New Pay Later (BNPL)

Feb 9, 2021

Sector: Financial Services

Sentiment: Bullish

Sezzle Inc. is a technology driven payments company. The Company provides a payment platform that facilitates payments between consumers and retailers. Sezzle’s payment product is a short-term, interest-free instalment plan that delivers to consumers both a budgeting and financing value proposition. The Sezzle Platform allows end-customers to make online purchases and effectively split the payment for the purchase over four equal, interest free, payments over six weeks. The end-customer makes the initial payment at the time of checkout and makes the subsequent payments fortnightly. It cover various product categories, such as women’s fashion, activewear, shoes, bags, outerwear, shoes, swimwear, beauty, cosmetics, supplements, fitness and wellness, and home and electronic products.

Last quarter report the compay announced another record results:

Each month in 4Q20 represented new records for Underlying Merchant
Sales (UMS)
, Active Consumers, Active Merchants, and Repeat Usage.
UMS for 4Q20 increased 205.4% YoY to US$320.8M (A$419.8M1, up by 40.6% QoQ).

December’s UMS exceeded November’s by 0.4% with annualized
run-rate UMS reaching US$1.36B (A$1.78B1).
Average monthly UMS reached US$106.9M in 4Q20 compared to
US$76.1M in 3Q20 and US$35.0M in 4Q19.

Merchant Fees as a percentage of UMS were 5.4% in 4Q20 compared
to 5.5% in 4Q19, reflecting the expansion into large enterprise.
Active Consumers for 4Q20 rose 143.9% YoY to 2.2M (+24.5% QoQ).

Active Merchants increased 166.6% YoY in 4Q20 to 26,690 (+27.8% QoQ).

Sezzle’s consumer profile continued to improve as Active Consumer
repeat usage grew to 89.8% (24th consecutive month of improvement)
and is a key driver to lower loss rates.

  • SP climbs as much as 5.9% to A$9, the U.S.-based buy-now-pay-later firm’s highest level since Sept. 1
  • Strong growth numbers over the holiday period for SZL and a stellar market debut by larger U.S.-rival Affirm Holdings (AFRM) has raised the attractiveness of fast growing BNPL stocks
  • SZL is up ~46% so far this year
  • The large increase of UMS was also result of US Government Stimulus which includes stimulus checks, Unemployment Benefits and Small Business Loans.

The Technical Perspective

✅ SP is now trading after a bullish intersection with all confirmation that SP has entered into a bullish trend.

✅ Heiken Ashi shows very bullish candles.

✅ Our long term perspective is hold, while the shor term is wait holding cash position until SP meets SMA.

SP is currently trading 9% above SMA. We normaly prefer entering when SP is under or at same level of SMA.

🚩 An entry now could be dangerous as SP is currently trading 38% above SMA. Ideally we would like to be buying when SP meets SMA next. Any entry at this level, must ensure the SP is trading above EMA at all times (the yellow line).

Disclaimer: Note that although we have been investing in the Australian Stock Exchange and other markets over 10 years, anything you read within this group is NOT financial advise; it is general information only and we strong recommend to consult a financial adviser before making any investment decision that could have significative impact on your wealth*