Sezzle Inc (SZL) Shares Have Shot Higher – Is It Still Cheap?

The Sezzle Inc (ASX: SZL) share price leapt as much as 80% following its ASX initial public offering (IPO) today.

What Does Sezzle Do?

Sezzle is a US-based and incorporated business, which provides an interest-free instalment payment solution.

Sezzle has been operating since 2017 and is now in 12 countries. It listed on the ASX with an initial public offering price of $1.22 per share/CDI. Sezzle does not charge interest or initiation fees, however, it does charge failed payment fees of US$10.

What Now?

With a listing price of $1.22, Sezzle’s share price climb to $2.17 means it has risen some 78% on the first day (at the time of writing).

Sezzle has been growing strongly in recent times. At 31 March 2019, the company had 3,321 active merchants, mostly in the US, with 269,820 ‘active’ customers. In 2018, Sezzle’s total income grew by an average quarterly growth rate of 101%.

Sezzle noted that merchant/retailer fees as a percentage of merchant underlying sales were 4.8% and 3% in FY18 and FY17, respectively.

Sezzle will be focusing its efforts and money on growing in the small and medium business segment, expanding the team for enterprise merchant accounts, growing in Canada, growing its in-store capabilities and improving its ‘fraud and decisioning models’.

Obviously, a key part of the company’s growth will be how many transactions it can actually fund. This IPO money will help somewhat, and being listed will give it more leverage to talk to lenders like banks.

Don’t Forget The Risks!

The company’s shares have got off to a great start, but there are plenty of risks. It is much smaller than its peers like Afterpay Touch Group Ltd (ASX: APT), doesn’t have much trading history and one of the stated risks in the prospectus is the “the ability to turn the net transaction margin into a positive percentage.”

Financial disclosure: At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here or enter your email address below to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just enter your email address below and we'll send you the report right away.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

CLICK HERE TO GET THE REPORT

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

General Financial Advice warning
The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms & Conditions and Financial Services Guide before using this website.

© Rask Australia 2020

Join 20,000+ smart investors

Join the Rask Australia mailing and we’ll send you free investment reports, podcasts, expert insights, investing courses, ASX news and lots, lots more. All free. 

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian-owned.

feedback-icon

What can we do better?

Howdy, ASX investor.

I really care about your experience today.

Please, let me know if you have any suggestions we can use to improve our site and help others invest in ETFs. 

Cheers! 

Owen Rask