Afterpay VS Sezzle: Which company performed better in November?

We look at how both companies performed in November – a month which encompassed the all-important Black Friday and Cyber Monday Sales.

If there’s one constant in the Buy Now Pay Later (BNPL) sector, it’s companies touting record beating months, quarters and years.

On Wednesday, after the market-close, Afterpay (APT) reported that it had hit a new monthly sales milestone, with the company reporting that it exceeded $2 billion in underlying sales during November.

On Thursday, Sezzle (SZL) – the US and Canadian focused BNPL company reported its own record performance across November – revealing significantly higher underlying sales, consumers and merchants metrics.

Interestingly, Afterpay fell in response to its media release, while Sezzle rose, if just by a small amount.

Afterpay share price: November results at a glance

Buoyed by the Black Friday and Cyber Monday sales periods, Afterpay notched up a record set of monthly sales in November. Looking at these results, and on a year-on-year basis, in November Afterpay saw:

  • Underlying sales (GMV) reach $2.1 billion, up 112% or 119%, on a constant currency basis
  • UK underlying sales rose 315%, with merchants rising in the region by 800% year-on-year
  • Active customers in the US rose by 1 million
  • Basket sizes across the US and UK rose by 30% and 25%, respectively, during the Black Friday sales period.

Despite those strong results, investors responded with mixed feelings: Though the stock opened higher on Thursday, APT was quickly bid lower, down by 2.21%, to $96.38 per share by 2:36PM. Short-term weakness aside, Afterpay remains up over 200% YTD.

In response to this update, analysts from RBC reiterated their Outperform rating and $107 price target, while saying:

‘The November update suggests APT is tracking ahead of our 1H21 forecasts which are ahead of consensus. ‘We think seasonality may be more pronounced in November this year than usual given the elevated levels of online retail penetration we are seeing across all markets.

‘With APT’s strong customer engagement of existing customers, sets the business up with strong momentum heading into next year, in our view,’ the investment bank added.

Sezzle share price: Stronger growth from a smaller base

By comparison to Afterpay, Sezzle reported even faster sales growth during the November month, with all of the company’s operational metrics improving dramatically in that period. Looking at these results, and on a year-on-year basis, in November Sezzle saw:

  • Underlying Merchant Sales (UMS or GMV) hit $153.9 million, up 188.5%
  • Active merchants reach 24,846, up 164.5% and active customers hit 2,071,133, up 151.5%
  • Canadian UMS growth rates outperformed the US on a year-over-year and month-over-month basis.

Like Afterpay, while investors initially responded positively to this monthly release, by the afternoon session the Sezzle share price was down over 3%, at $6.10 per share.

Despite the investor response, the Sezzle CEO, Charlie Youakim added that 'In addition to our record setting performance in November and over the BFCM [Black Friday/ Cyber Monday] weekend, we are extremely excited about the direction of our business, as we recently partnered with GameStop and eCommerce platform Wix.'

As with Afterpay, analysts from RBC remain optimistic on Sezzle, reiterating their Outperform rating (Speculative) and $11.00 price target.

‘SZL remains well ahead of the company’s previous guidance of exceeding U$1b annualized UMS, while both UMS and customer numbers are tracking ahead of our CY20 forecasts (U$948m).’

‘Given SZL’s current scale and merchant skew to SMB, successfully adding larger and enterprise merchants and partners such as GameStop and Wix to the platform would materially move the dial,’ the investment bank added.

At the time of writing, the Afterpay share price had fallen 2.79% in the last month while the Sezzle share price was down a more substantial 8.01%.

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