Qifu Technology vs. Sezzle: Which Credit Tech Stock is the Smarter Buy?

Core Insights - Qifu Technology (QFIN) and Sezzle (SEZL) are significant players in the credit tech sector, with QFIN focusing on AI-powered credit solutions in China and SEZL providing buy-now-pay-later services in the U.S. [2][8] Qifu Technology (QFIN) - QFIN operates a capital-light model that reduces credit risk and enhances growth, utilizing the Intelligence Credit Engine (ICE) to connect borrowers with financial partners [4][6] - The company reported a 15.8% year-over-year growth in total facilitation and origination loan volume, with operating income increasing by 44.8% year-over-year [5] - QFIN's AI-Plus credit strategy, launched in early 2025, aims to improve credit processes and has already led to increased loan volumes and stable delinquency rates at 0.6% [6] - The Chinese digital lending platform market is projected to grow at a CAGR of 27.3% from 2024 to 2030, indicating a favorable market environment for QFIN [7] Sezzle (SEZL) - SEZL targets the underbanked population in the U.S. fintech market, capitalizing on the growing digital payment sector expected to grow at a CAGR of 11.8% from 2023 to 2028 [8] - The company experienced a remarkable 123.3% increase in revenues year-over-year in Q1 2025, driven by a 64.1% rise in gross merchandise volume [9] - SEZL's customer purchase frequency increased to 6.5 times annually, reflecting higher transaction volumes and revenue growth [11] Financial Estimates - The Zacks Consensus Estimate for QFIN's 2025 sales is $2.6 billion, suggesting a 7.6% year-over-year growth, with earnings expected to rise by 25.3% [12] - For SEZL, the 2025 sales estimate is $441.8 million, indicating a 62.9% year-over-year growth, with earnings projected to grow by 77.2% [15] Valuation Comparison - QFIN is trading at a forward P/E ratio of 5.97X, while SEZL is at 43.86X, indicating that QFIN is relatively cheaper compared to SEZL [17] - Despite SEZL's strong growth and high Zacks Rank, QFIN presents a more attractive risk-reward profile for value-conscious investors [19][20]