Why is the Sezzle share price outperforming on Wednesday?

The Sezzle Inc (ASX: SZL) share price is holding up well in early trade.

Sezzle shares closed yesterday trading for 59 cents and are currently trading for, well, 59 cents apiece.

This comes after the ASX buy now, pay later (BNPL) share released its August business update before market open this morning.

It also comes amid wider selling pressure in the leadup to tonight’s US Federal Reserve rate decision. This sees the All Ordinaries Index (ASX: XAO) down 0.93% at this same time, with rival ASX BNPL stocks down significantly more.

So, a flat share price is a win today.

What was reported for August?

The Sezzle share price is outperforming after the company reported underlying merchant sales (UMS) edged 1.1% higher month on month to US$142.8 million.

Despite that, the BNPL stock reported a 4.8% decrease in total income in August from the prior month to US$9.7 million. While down from July, total income increased 1.7% year on year.

The Sezzle share price could be receiving some tailwinds after the company reported its key revenue and cost initiates are proceeding and expected to generate US$40 million in annualised revenue and cost savings. While the company’s cash burn is declining significantly, the average monthly burn in 3Q22 (through to 31 August) still stands at US$1.9 million.

Commenting on the performance, Sezzle CEO Charlie Youakim said:

In 2022, we have not pursued growth for the sake of growth, and this has been reflected in our recent monthly results, which have shown year on year improvement in total income despite lower UMS. We have had opportunities to pursue significant growth that would be unprofitable, but we believe it is not the right time or environment for us to pursue such activities

Regarding Sezzle’s revenue and cost savings plans, Youakim added, “We are just getting started and are excited to announce we are embarking on another US$20 million in annual revenue and cost saving initiatives.”

Sezzle share price snapshot

There’s no beating around the bush on this one. It’s been an absolute horror year for the Sezzle share price, down 90% over 12 months. That compares to a full-year loss of 8% posted by the All Ordinaries.

The post Why is the Sezzle share price outperforming on Wednesday? appeared first on The Motley Fool Australia.

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More reading

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• Why is the Sezzle share price sinking on Monday?
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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