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Sezzle's three-month, 10-bagger run examined

We look at Sezzle’s mammoth share price run up as well as a recent key change to the company’s charter.

SZL Source: Bloomberg

Sezzle share price sizzles over 1,000%

The Sezzle (SZL) share price fell on Tuesday as volatility returns to equity markets amid concerns of a wave two coronavirus outbreak. Of course, such a move represents only a short blip, in an otherwise staggering run-up from the fast-growing, buy now pay later (BNPL) company.

Indeed, at the time of writing, off Sezzle’s March lows – the company has seen its share price skyrocket an astounding 1,080% – in the space of just three months.

This comes as the company notches up spectacular growth across all of its key metrics and capitalises on the secular shift towards online spending. Specifically, as part of the company’s Annual General Meeting (AGM), SZL reiterated the following Q1 highlights, including:

  • Repeat usage improving 190 bps to 85.6%, on a quarter-over-quarter basis
  • Active customers increased 326%, on a year-over-year basis
  • Underlying merchant sales (UMS) hit US$119.4 million, up 321% on a year-over-year basis
  • Active merchants grew 27%, on a quarter-over-quarter basis

Further afield, the entire BNPL sector is spectacularly up in the last few months, though by a less pronounced degree than Sezzle. Since their year-to-date lows: Afterpay (APT) is up ~600%, Zip (Z1P) is up ~400% and Splitit (SPT) is up 546%.

New developments in focus

Capping off the strong growth in the underlying business and the company’s share price – Sezzle today revealed that it had altered its company charter to become a Public Benefit Corporation (PCB).

As a PCB Sezzle will not only focus on maximising shareholder profits, but also place a strong emphasis on creating a positive impact for the community at large. As the company’s CFO, Karen Hartje, put it:

‘At Sezzle, we see achieving stellar growth and maintaining our commitment to the community's collective good as two sides of the same coin.’

Further commenting on today’s announcement, Sezzle’s Chief Executive and co-Founder Charlie Youakim said:

‘Becoming a PBC cements our company's ethos – “to financially empower the next generation” – into our governance structure.’

Mr Youakim went on to say that ‘Young consumers across the globe are looking for long-term, trusted partners in their financial journeys. The PBC designation strengthens our positioning as the marquee mission-driven payments platform in North America. It shows that we are not just paying “lip service' to the business's mission side – we are 'walking the walk.”’

Other prominent PBCs include outdoor clothing company Patagonia, shoe-maker Allbirds and running & yoga fashion company Athleta.

SZL last traded at $4.03 per share.

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