The Sezzle Inc (ASX: SZL) share price is on the rise again today, up 1.5% in early afternoon trading. That puts Sezzle’s share price gain just shy of 52% so far in August. And shares have gained 523%, year-to-date.
In comparison, the All Ordinaries Index (ASX: XAO) is up 4.5% in August and down 7.0% in 2020.
With its blistering year-to-date share price gain, you might think Sezzle was somehow immune to the COVID-19 panic selling that rattled most shares on the ASX. Yet Sezzle suffered even more than most, putting the faith of its loyal shareholders to the ultimate test when its share price crashed 80% from 27 February through to 23 March.
Shareholders with the nerve to hold on — or those fortunate enough to buy on 23 March — were amply rewarded though. Sezzle’s share price is now up 2,697% from that low. Yes, you read that right.
What does Sezzle do?
Sezzle is a leading company in the booming buy now, pay later (BNPL) field, listed on the ASX and based in the United States. The company’s technology provides a payments platform for simple and secure payments between retailers and their customers.
Sezzle’s BNPL model allows customers to purchase products interest free, repaying the money via a short-term instalment plan over 4 equal payments spread across 6 weeks. The first payment is made at checkout with the rest paid on a fortnightly basis. The retailers receive the purchase price from Sezzle, for which Sezzle charges a processing fee.
The company has expanded rapidly in the BNPL space, with roughly 1.5 million active users and more than 16,000 participating retailers globally.
Sezzle shares first traded on the ASX in August 2019.
Why has the Sezzle share price soared 52% in August?
There’s no single reason pointing to Sezzle’s remarkable share price performance this month, and indeed since 23 March.
Sezzle operates in the fast growing BNPL space. And investors are pricing considerable future growth into the trend of paying for your purchases in interest free instalments.
The company has been performing well, reporting a 57.5% increase in its underlying sales for the June quarter. Its $86 million capital raising included a $7.2 million share purchase plan for eligible shareholders. On 7 August the company announced the plan was oversubscribed, indicating the strong ongoing interest in the BNPL provider.
The Sezzle share price will be one to watch next week. The company reports its half year results for the year ending 30 June on Monday 31 August.
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Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia has recommended Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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