Sezzle (SEZL) is turning out to be one of the hottest stocks of 2024. The “buy now pay later” app provider has skyrocketed 1,439% year-to-date as of Thursday’s closing price. It’s been a major driver of the specialty-finance industry’s impressive climb.
That is even after the stock pulled back from its Nov. 22 all-time high of 477.53, according to IBD MarketSurge. The stock is testing the 10 week moving average, which could lead to a follow-on buying opportunity, if the stock rebounds from that level.
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Sezzle stock has surged amid triple-digit earnings growth over the past four quarters, while sales growth has been steady over eight quarters. The stock is a recent new issue; it listed on the Nasdaq Aug. 17, 2023.
‘Buy Now Pay Later’ Stock Links With Amazon, Walmart
The fintech company provides a digital payments platform that offers alternatives to traditional credit cards and other payments methods. Users can choose to pay for products they buy in full or in two or four installments or over an even longer term. The app can be used to shop in-store and online on Amazon (AMZN), Walmart (WMT), Target (TGT) and other e-commerce sites.
Third quarter earnings on Nov. 7 and a strong outlook gave a powerful boost to the stock. Sales grew 71% to $70 million and earnings per share of $2.92 sky rocketed from the previous year when the company reported just 23 cents in per-share earnings.
Underlying merchant sales (UMS), a key metric that drives sales, hit a record $659.9 million as consumers’ purchasing frequency grew 5.4 times vs. 4.1 times in the third quarter of 2023.
The company noted that “the top 10% of consumers, as measured by UMS, transacted 77 times per year on average during the rolling 12-month period ended Sept. 30, 2024.”
For the full year, Sezzle raised its sales growth outlook to 55%, up from its previous guidance of 35%-40%. It also bumped up its earnings outlook to $9.80 from $6.75 per share.
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Sezzle is the leader of its industry group, with Composite Rating and Relative Strength Rating of 99. The EPS Rating is 83.
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The Financial Services-Specialty industry group has also moved up rapidly in rankings. The group held 60th place just six months back among Investor’s Business Daily’s 197 industry groups. It moved up to 25th three months ago and currently holds eight place.
Other notable stocks in the group include Tradeweb (TW), which is trading around the 50 day moving average as it tries to regain a flat base buy point of 136.13.
MSCI (MSCI) is breaking out of a flat base that has a buy point of 631.70. Thinly traded Tiptree (TIPT) has pulled back into a buy zone from a buy point at 20.80 and is holding above its 50-day line. Corpay (CPAY) is testing the 10-week moving average.
Also in the group, TransUnion (TRU), Fidelity National Information Services (FIS) and Intercontinental Exchange (ICE) are building bases. But all three remain below their 10-week lines.
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