Key Stats for Sezzle Stock
- Price change for Sezzle stock: -34%
- $SEZL Stock Price as of Aug. 7: $118
- 52-Week High: $196
- $SEZL Stock Price Target: $158
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What Happened?
Sezzle stock plunged 34% on Friday, marking its worst day in a year, even after the buy-now-pay-later company beat expectations on both revenue and earnings for Q2.
Revenue came in at $149.7 million, up 51.7% year-over-year, and gross merchandise volume hit a record $1.3 billion, up 37.9%. Net income climbed 47.7% to $40.8 million.
The company also raised its full-year guidance across the board, now expecting 35% revenue growth for the year, adjusted net income of $185 million, up from $180 million, and adjusted EPS of $5.25, up from $5.10.
Active subscribers jumped 76.4% year-over-year to 854,000, driven partly by new products like SezzleCash, a cash advance feature for subscribers that launched in June.
So why did Sezzle stock fall so hard despite beating estimates?
Management flagged that revenue growth is expected to slow to around 30% in the second half of the year, down from the 51.7% pace seen in Q2.
Executives also said the elevated revenue yield seen this quarter would normalize closer to 11.4% for the full year, a level more in line with typical seasonal patterns.
Wall Street’s reaction was mixed.
Keefe, Bruyette & Woods lowered its price target on Sezzle to $155 from $190 while keeping a Market Perform rating. B. Riley took the opposite approach, raising its target to $196 from $141 and maintaining a Buy rating, pointing to higher estimates following the beat.
Both targets still imply significant upside from where shares closed, ranging from 31% to 66%.
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What the Market Is Telling Us About Sezzle Stock
The scale of this drop shows just how much investors care about the trajectory of growth, not just the size of a beat.
A quarter with revenue up more than 50% and record subscriber growth would normally be celebrated, but guidance pointing to a slowdown to 30% growth in the second half was enough to override that enthusiasm.
Part of the story here is a deliberate step-up in marketing spend during the quarter, which the company used to test how far it could push customer acquisition while staying under a six-month payback period.
Management said it plans to pull back on that spend somewhat in the Q3, all else equal, which likely factors into the more cautious growth outlook.
Even with the sharp selloff, the split in analyst opinions suggests the market hasn’t fully settled on how to value Sezzle stock going forward.
B. Riley’s raised target and continued Buy rating signal confidence that the underlying business, including new products like Sezzle Send, still has room to grow.
KBW’s more cautious stance reflects the same worry that hit the stock Friday: that the easy comparisons and rapid growth rates of the past few quarters may be harder to repeat in the back half of the year.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!