30‑Second Take

Why now? A payment processor in the buy-now-pay-later space, Sezzle is on a hot streak. Its Q1 revenue growth of 123% was accompanied by a 50% uplift in its full year guidance but shares continue to trade at around 27x forward earnings, making it a great value pick for a stock that’s showing fierce forward momentum.

Trade Setup

Time frame: Swing to medium term
Edge type: Momentum breakout with fundamental catalyst

Snapshot Table

Chart

Growth and momentum have come together again this week for SEZL, with the stock up 9.18% over the last five days. After a breakout at the start of May, it has continued on the same upward trajectory, with only minor declines during intraday trading over the last five days. It has moved to within a few cents of its 52-week high within the last 24 hours and continues to trade around that level.

Bull Case 

Core thesis: Sezzle allows consumers to buy now and then pay off their purchases later. It has differentiated itself from rivals like Klarna and PayPal by offering tools and resources such as budgeting and gamified education to empower its customer base. 

Catalysts: The firm is rolling out new products, including a Pay-in-5 option and virtual cards, to expand its offering. Sales are expected to scale accordingly, with a 62% increase forecasted for 2025, followed by 20.8% in 2026. It’s not a coincidence that analysts lifted their earnings estimate by 46.6% earlier this month.

Valuation upside: The analysts’ consensus is for a high of $101.

Technical tailwind: SEZL is almost at level pegging with its 52-week high and the top-end analyst forecast. If it can break out above that level and continue its strong rally, it may attract new momentum traders with technical indicators reading bullish.

Bear Case 

Key risk: As Sezzle operates in the finance and lending space, it is subject to stringent legislation. Any changes to regulatory requirements could unsettle its growth spurt. This risk is exacerbated by its presence in multiple countries, each with varying compliance demands. 

Macro/sector headwinds: Changes in consumer spending habits or innovation on the part of its peers looking to replicate Sezzle’s success could heap pressure on its sales and earnings trajectory. 

Competitive threat: Larger firms with deeper pockets (such as PayPal) are a constant threat and could eat into market share.  

Crowded-trade concern: The stock could be subject to sharp corrections if sales and earnings expectations aren’t achieved.

Quick Checklist 

✅ Thesis still valid after today’s close
✅ Volume confirms move above key levels
✅ Catalyst date double-checked (Q1 earnings – May 15, 2025)

Deep‑Dive Links

• Q1 2025 Earnings Report 

• Analyst Ratings and Price Targets

• Short Interest Data

• Company Profile and Investor Relations

That’s all for today’s Everyday Alpha. We’ll have a new pick for you every morning before the market opens, so stay tuned!

Best Regards,
—Noah Zelvis
Everyday Alpha