Sezzle stock soared Thursday after it delivered a stellar beat-and-raise quarter. The fintech's momentum has shown little signs of pulling back, driven by its growing subscriber count and expanding product offerings.
Shares of the financial technology jumped 16% to $159.12 Thursday after it reported its third-quarter earnings after the closing bell Wednesday. The gain extended an eye-popping 175% rally over the last 12 months, according to Dow Jones Market Data.
In the third quarter, revenue grew about 43% to $167 million, topping Wall Street estimates of $155 million. Adjusted earnings of $1.37 a share outstripped consensus calls for $1.28.
Sezzle paired the beat with a higher full-year outlook and positive preliminary guidance for 2027. It expects revenue to grow about 43% in 2026, up from a prior estimate of 35%. The company also anticipates adjusted earnings to range from $5.45 to $5.50 a share, up from a previous forecast of $5.25. For next year, Sezzle sees adjusted earnings hitting $7.20 a share, well above Wall Street's estimates of $6.68.
Looking past the stellar quarter, some analysts found plenty under the hood to justify the stock rally.
Top of mind was subscriber momentum. Needham analyst Kyle Peterson noted Sezzle's active subscribers surged 68% to 955,000 in the third quarter as the company shifted more users toward subscription models. He bumped up Sezzle's price target to $220 from $172, suggesting a nearly 61% upside from its closing price of $136.69 on Wednesday. He maintained a Buy rating on shares,
Engagement also climbed: The average active consumer transacted nearly eight times during the third quarter, generating $41 in fees and charges -- up roughly 30% from a year ago. Oppenheimer analysts also highlighted those improving unit economics, noting Sezzle's take rate, or the percentage cut it keeps per transaction, expanded 60 basis points to 11.9%. The firm has a Perform rating on the shares.
Peterson sees a multi-year growth runway fueled by new offerings like SezzleCash short-term advances and Pay in 5, and Sezzle's push for a national bank charter that could slash funding costs and accelerate product launches.
Sezzle's strong earnings came after peer Block also delivered a beat-and-raise third quarter after the closing bell Tuesday. Shares of Afterpay-parent Block closed up about 15% at $11.63 on Wednesday.
While Sezzle rallied, a significant stock market pullback left other fintechs in the red. Affirm dropped 7.4%, Klarna declined 3.9%, and Block fell 3.9%.
It hasn't been an easy year for fintech companies as persistent inflation has weighed down stocks. On Sezzle specifically, Wall Street remains divided: Of the seven analysts covering shares, four have a Buy rating while three rate the stock as Hold.
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