Can On-Demand's Popularity Continue to Help SEZL Pay Dividends?

Core Insights - Sezzle (SEZL) launched On-Demand, allowing users to Pay-in-4 wherever Visa is accepted, enhancing its buy-now-pay-later solution and expanding merchant partnerships [1] - In Q4 2024, Sezzle registered 707,000 Monthly On-Demand & Subscribers (MODS), with a seasonal decline of 7% in the March quarter [2] - The recent quarter saw a 14% sequential increase in MODS, reaching a record 748,000, attributed to targeted marketing initiatives with an 8-fold increase in marketing spend year-over-year [3] Financial Performance - On-Demand's popularity led to a 74.2% year-over-year increase in gross merchandise volume and a rise in purchase frequency from 4.8 to 6.1 times, resulting in a 76.4% year-over-year top-line growth [4] - Non-transaction-related operating expenses increased by 50.4% year-over-year, yet the operating margin expanded by 6.8 basis points to 36.6%, indicating a scalable cost structure [5] - The lifetime value of MODS is strong due to recurring interactions, supporting expectations for continued top-line growth [6] Market Performance - Sezzle's stock surged 281.8% over the past year, outperforming the industry’s 15% increase and the S&P 500's 19.4% rise, as well as competitors Green Dot (GDOT) and OppFi (OPFI) [7] - The forward price-to-earnings ratio for SEZL is 22.25, higher than Green Dot's 9.14 and OppFi's 6.97, while the industry average is 21.74 [11] - The Zacks Consensus Estimate for SEZL's earnings in 2025 is $3.27 per share, indicating a 77.7% increase from the previous year [14]