1 Stock-Split AI Stock Up More Than 2,200% That Looks (Sort Of) Cheap

Core Insights - Sezzle, a buy-now-pay-later (BNPL) fintech company, has shown remarkable stock performance, executing a 6-for-1 stock split shortly after going public [1] - Despite a recent decline of over 30% following its second-quarter earnings report, Sezzle's business fundamentals remain strong, with expectations of 60%-65% year-over-year revenue growth [2][3] - Sezzle's stock is still up more than 2,200% since its public debut at a split-adjusted price of $3.78 in August 2023, indicating significant long-term growth potential [3] Business Performance - In the second quarter, Sezzle's revenue grew by 76%, with a net margin of 28%, showcasing its profitability amidst rapid growth [3][4] - The company has a gross merchandise volume (GMV) of approximately $927 million, representing only 1.4% of the overall BNPL market, which indicates substantial growth opportunities [4][5] - Sezzle is effectively engaging customers and increasing payment frequency, with innovative features appealing to younger generations, such as credit scoring optionality [6] Profitability and Capital Allocation - Sezzle's adjusted net income increased by 92% year-over-year, with expectations to generate at least $170 million in adjusted EBITDA for the full year [7] - The company is prioritizing capital return to shareholders, which is uncommon for a fast-growing firm, and has authorized a $50 million share repurchase plan [8] Market Position and Valuation - Following a drop in stock price, Sezzle trades over 50% below its 52-week high and at a multiple of less than 24 times forward earnings expectations, suggesting potential for value investment if growth continues [10]