Track market-moving stories before they get noisy

Key Takeaways SEZL grew active subscribers 48.4% to 714,000 as higher-value users became a bigger focus.Sezzle reached record purchase frequency, with repeat usage accounting for 97% of total orders.SEZL is expanding with Pay-in-5, Canada virtual card and new banking products through 2027. Sezzle Inc. (SEZL - Free Report) entered 2026 with stronger customer engagement and a clear shift toward higher-value subscribers. In the first quarter of 2026, active subscribers rose 48.4% year over year to 714,000, while the combined total of monthly on-demand users and subscribers reached 887,000, up 34.8%. Management believes this focus supports better retention and lifetime value.

The subscriber push is also changing how often customers use Sezzle. In the first quarter, average quarterly purchase frequency climbed to a record 7.1 times from 6.1 a year earlier. Active consumers increased 13.6% to 3.1 million, while transactions jumped 35.8% to 9.9 million. Repeat usage reached 97% of total orders.

These gains helped lift Gross Merchandise Volume (GMV) by 37.3% to $1.1 billion, nearly matching the holiday-driven fourth quarter. In the first quarter, revenues rose 29.2% to $135.5 million, representing 12.2% of GMV.

Marketing remains central to the subscriber growth strategy. First-quarter spending rose to $11.2 million from $5.3 million a year earlier, yet Sezzle reported a payback period of less than six months. The Earn tab logged 4.8 million visits since its launch in June 2025, and users showed a 55% higher Buy Now Pay Later (BNPL) conversion rate within 30 days after their first Earn tab activity.

The next test is whether Sezzle can turn stronger engagement into lasting customer value. Pay-in-5 is showing encouraging early demand, while the mobile plan, virtual card in Canada and enhanced long-term lending add more reasons to stay active. Sezzle is also developing deposit accounts and card products, with management expecting much of its current product roadmap to be completed and scaled by the end of 2027.

How Are Affirm & Klarna Growing Their Users?Affirm (AFRM - Free Report) is showing subscriber-style growth similar to Sezzle, helped by a wider merchant reach and frequent use of its payment products. Its expanding consumer base suggests BNPL demand remains healthy across major platforms. In the quarter ended March 2026, AFRM reported 26.8 million active consumers, up 22% year over year.

Klarna Group plc (KLAR - Free Report) is also adding users, as it broadens beyond checkout into banking, cards and longer-term financing. Its scale is much larger than Sezzle’s, but the growth pattern reflects the same push toward deeper consumer relationships. In the first quarter of 2026, KLAR reached 119 million active consumers, rising 21% year over year.

SEZL’s Price Performance, Valuation & EstimatesShares of Sezzle have outperformed in the past three months compared with the broader industry and the S&P 500 Index.

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From a valuation standpoint, Sezzle’s shares have a Value Score of D. In terms of forward 12-month P/E, SEZL stock is trading at 30.01X, which is at a premium to the Zacks Financial Transaction Services Market industry’s 17.27X.

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Sizzle’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised upward to $5.10 in the past month. The consensus estimate for the metric indicates a year-over-year increase of 42.06%.

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Sezzle currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Sezzle's rally is backed by rising GMV, revenue, profits and higher 2026 guidance.Purchase frequency hit 7.1 times, while subscribers rose by 44,000 to 714,000 in the quarter.SEZL's premium valuation raises risk, but margins, AI efficiency and new products support growth. Sezzle Inc. (SEZL - Free Report) has been one of the more exciting names in buy now, pay later, and the rally in SEZL has naturally made investors ask a simple question: Is the move already done, or is there still upside left?

The stock has earned attention because the business is not just growing; it is growing profitably. That matters in a fintech market where PayPal Holdings, Inc. (PYPL - Free Report) and Shift4 Payments, Inc. (FOUR - Free Report) still draw plenty of investor focus, but where investors are rewarding companies that can show clean execution.

SEZL’s price performance has already been sharp, and that creates a higher bar. Over the past month, the company has rallied more than 37%, well ahead of its industry’s increase of 8.4%. Meanwhile, peers like PayPal Holdings and Shift4 Payments have risen 9.9% and 24.9%, respectively, while the S&P 500 composite has inched up 1.8%.

One-Month Price Performance

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SEZL’s Earnings Power is Driving the ThesisSezzle’s first-quarter 2026 results provide a strong foundation for the bullish case. Gross merchandise volume (GMV) rose 37.3% year over year to roughly $1.1 billion, while total revenues increased 29.2% to $135.5 million. Net income reached $51.3 million, equal to a 37.9% profit margin, and adjusted EBITDA was $71.1 million, representing a 52.5% margin.

Sezzle is not relying only on volume growth. The company is converting growth into earnings at a high rate, which gives the stock a stronger fundamental base after its rally. For a fintech company operating in a credit-sensitive category, that combination of revenue growth and profitability is especially important.

Management also raised its full-year 2026 outlook. Sezzle now expects revenue growth of 30-35%, adjusted net income of $180 million and adjusted EPS of $5.10. This guidance gives investors a clearer earnings anchor when thinking about valuation. SEZL is not a low-multiple stock after its run, but the premium looks more defensible if earnings continue scaling at this pace.

Sezzle’s Engagement Trends Point to Quality GrowthThe strongest part of Sezzle’s operating story is user engagement. Average quarterly purchase frequency increased to 7.1 times from 6.1 times a year earlier. Active consumers reached about 3.1 million, while monthly on-demand users and subscribers stood at 887,000.

This matters because higher purchase frequency can support better unit economics over time. A customer who uses Sezzle more often is more valuable than one who appears only at checkout once or twice. The company’s subscriber base also continues to move in the right direction, with subscribers rising by 44,000 in the quarter to 714,000.

That subscriber focus is central to the investment thesis. Sezzle is prioritizing users with higher lifetime value, stronger repeat behavior and better engagement across the platform. This should help reduce dependence on one-time transactions and create a more durable revenue stream.

Product Expansion Adds Upside Optionality for SEZLSezzle is also widening its product set beyond its original Pay-in-4 offering. Pay-in-5, enhanced long-term lending, the virtual card in Canada and Sezzle Mobile all add more ways for consumers to use the platform. These products may not all become major profit drivers immediately, but they increase the number of touchpoints between Sezzle and its customers.

The company is also using AI to improve efficiency. Its AI support chatbot is resolving roughly 60-70% of chats without escalation, while internal tools are being used across chargebacks, support, business intelligence and engineering. That operating discipline is important because it supports margin expansion while the business continues to grow.

SEZL’s Estimate Revisions Depict a Bright OutlookOver the past week, earnings estimates for both 2026 and 2027 have been revised marginally upward, signaling a bullish outlook from analysts. These figures also suggest year-over-year growth of 42.06% and 25.74%, respectively.

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Valuation is the Main Risk for SEZLThe main concern is valuation. SEZL’s rally has already priced in a lot of optimism, so the company needs to keep delivering strong quarters. The stock trades at 8.88X forward 12-month sales per share versus 5.00X for the Zacks sub-industry. This is no longer cheap, but it looks fair for a fintech growing revenue around 30% to 35% and producing strong adjusted EBITDA.

On the other hand, PYPL trades at 1.14X forward 12-month sales per share, while FOUR trades near 1.44X forward 12-month sales per share.

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Competition also remains a watch item, especially as PayPal and Shift4 Payments continue shaping investor expectations for BNPL and digital payments. Still, Sezzle’s current momentum is being driven by its own execution rather than broad sector enthusiasm alone.

Conclusion: SEZL Still Looks Like a BuySEZL has already rallied hard, but the move does not look empty. Sezzle is growing GMV, expanding revenue, lifting guidance, improving engagement and producing strong profits. Valuation is no longer cheap after the rally, and that raises the need for consistent execution. PayPal and Shift4 Payments remain important BNPL and payments peers, yet Sezzle offers a cleaner, high-growth, high-margin story.

  Guidance, margins and subscriber growth support the view that the business can grow into its higher expectations. With earnings momentum still strong and multiple growth levers in place, SEZL remains a Buy for investors comfortable with volatility. Estimate revisions also echo a similar sentiment, and therefore, for investors, the recent rally looks justified rather than excessive.

At present, SEZL carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Sezzle CEO and Executive Chairman Charlie Youakim appeared on CNBC’s Squawk Box on Friday, June 26, to argue that the buy-now-pay-later sector is pulling market share from legacy regional and community banks and credit unions that never built the digital-first payment rails that younger consumers now expect. “The losses are coming from these nonpublic companies… they just don’t have the technological solutions,” he said in the segment.

Sezzle (NASDAQ:SEZL) stock is up over 150% since the beginning of 2026 and up over 50% in the last month. The company’s market cap now sits near $5.36 billion.

The Bank Displacement Thesis Youakim’s central claim is that BNPL is taking wallet share from institutions that don’t have the technology stack to engage Gen Z and younger millennials. He pointed to Sezzle’s own app data as evidence the consumer remains healthy at the lower end, and said 70% of Sezzle’s customer base is 40 and under. He added that the cohort skews slightly older each year as customers stay with the product, a retention signal that supports the company’s lifetime-value pitch.

Youakim also framed BNPL as a structurally safer credit alternative to revolving credit cards because the product halts further purchases the moment a customer misses a payment. That circuit-breaker design, in his view, is one reason Sezzle’s loss curve has tightened even as GMV scales.

In Q1 2026, Sezzle posted $135.54 million in revenue, up 29.2% year over year, adjusted EPS of $1.43, and net income of $51.30 million, up 41.9%. GMV reached roughly $1.10 billion, active subscribers grew 48.4%, and average quarterly purchase frequency hit a company-record 7.1x.

Sezzle’s Pure-Play Short Duration Lending Differs from Affirm and Klarna Youakim drew a sharp line between Sezzle’s model and those of larger BNPL names. He described Sezzle as a “pure play” short-duration lender, with biweekly pay-in-five and 6- to 8-week loans that turn over multiple times a year. That structure, he argued, supports stronger return on equity and margins than longer-tenor installment books. He noted Affirm’s BNPL product is about 15% of its business, with the rest being long-duration installment lending, and grouped Klarna alongside Affirm on the long-duration side.

Sezzle’s reported financials support the margin angle. Operating margin runs at 61%, return on equity sits at 91.9%, and provision for credit losses improved to 1.2% of GMV from 1.6% a year earlier. Management has raised full-year guidance, now targeting revenue growth of 30-35%, adjusted net income of $180.0 million, and adjusted EPS of $5.10.

What To Watch Next Sezzle trades at a forward P/E of 19, with an average analyst price target of $134.33, which is well below the stock’s current price of $167.73. Investors interested in the business might consider tracking the company’s pending bank charter application, the rollout of Sezzle Mobile and Agentic Commerce in Canada, and credit performance as the loan book scales.

It’s important to keep in mind that CEO Youakim is a founder in the BNPL sector and probably carries some degree of bias. BNPL still carries real consumer credit exposure, is facing expanding regulatory scrutiny, and is facing active antitrust litigation against Shopify, all factors that could complicate the displacement story if the macro turns.