Sezzle (SEZL +0.03%) has almost tripled year to date as its buy now, pay later platform continues to attract new users and more engagement from existing customers. The fintech company looks like it still has more room to run thanks to solid top-line growth and expanding profit margins.
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Sezzle is winning over younger generations
Sezzle is an alternative to credit cards that splits purchases into interest-free installment plans. It's free for consumers who pay on time, with merchant fees being Sezzle's main revenue engine.
NASDAQ: SEZL
Key Data Points
This setup makes it convenient for younger users looking for ways to make expenses more manageable and who are more comfortable with alternatives to credit. Sezzle told investors that 24.5% of its users are 18-29 years old, with an additional 56.8% of its active customers aged 30-48.
Most of Sezzle's customer base skews younger, which may set the foundation for continued financial outperformance. Revenue increased by 29.2% year over year in the first quarter thanks to that large user base, and those results prompted Sezzle to increase its full-year 2026 guidance across key metrics, like revenue and net income.
The guidance changes were pretty meaningful. Sezzle now anticipates 30% to 35% year-over-year revenue growth throughout 2026, up from its prior guidance of 25% to 30%. These gains are built on a 48.4% year-over-year increase in active subscribers, who get extended payment flexibility, exclusive rewards, and other perks in their monthly plans.
High net income growth supports an attractive valuation
Sezzle's high revenue growth also came with even stronger net income growth, with that figure standing at 41.9% year over year in Q1. That growth has resulted in a forward P/E ratio of 19, which presents a good buying opportunity. Sezzle had a forward P/E ratio above 50 just a year ago.
That earnings momentum could continue thanks to Sezzle's new products. Sezzle recently unveiled enhanced long-term lending, a pay-in-5 option, the Sezzle Mobile Plan, and virtual cards in Canada.
The mobile plan is $29.99 per month and is only available to Sezzle Anywhere members who already pay $19.99 per month. These mobile plans help Sezzle integrate itself more into daily spending and may lead to new products in the future.
Sezzle is even in the process of becoming a shopping and engagement platform that uses agentic artificial intelligence to make product recommendations. This strategy could increase how often people use Sezzle, and more engagement often translates into more transactions.
Sezzle combines high growth rates and attractive margins with a reasonable valuation and long-term tailwinds. Even though the fintech stock has rallied considerably, it still looks like a compelling pick.
