WEBULL

How Investors May Respond To Sezzle (SEZL) Joining The S&P SmallCap 600 Index

Simply Wall St · 1d ago
  • Earlier this week, S&P Dow Jones Indices announced that Sezzle will be added to the S&P SmallCap 600 index, bringing the buy-now-pay-later provider into a widely tracked U.S. benchmark.
  • Index inclusion can matter because funds and ETFs that track the S&P SmallCap 600 generally need to buy Sezzle shares, potentially deepening liquidity and broadening the investor base without changing the company’s underlying operations.
  • With Sezzle’s entry into the S&P SmallCap 600 expanding its potential investor base, we’ll examine how this affects the existing investment narrative.

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Sezzle Investment Narrative Recap

To own Sezzle, you need to believe its buy now pay later model can keep scaling profitably, with disciplined credit risk and a path to stronger margins through higher value subscription products. Inclusion in the S&P SmallCap 600 may support liquidity and visibility, but it does not materially change the key short term catalyst of converting On Demand users to higher margin offerings, nor the biggest risk around rising credit losses as Sezzle serves more first time borrowers.

The recent decision to raise full year 2025 net income guidance to US$125.0 million while keeping revenue growth expectations steady is particularly relevant here, because it shows management’s focus on earnings quality at a time when index inclusion is drawing new attention to the stock. How effectively Sezzle continues to improve profitability while managing higher marketing spend and credit risk will likely shape how investors read this latest index news in the context of its broader growth story.

Yet behind the index headlines, investors should be aware that rising credit losses and a broader risk appetite could...

Read the full narrative on Sezzle (it's free!)

Sezzle's narrative projects $885.4 million revenue and $232.2 million earnings by 2028.

Uncover how Sezzle's forecasts yield a $108.50 fair value, a 54% upside to its current price.

Exploring Other Perspectives

SEZL 1-Year Stock Price Chart
SEZL 1-Year Stock Price Chart

Seventeen members of the Simply Wall St Community currently see Sezzle’s fair value anywhere between about US$9 and US$267 per share, highlighting very different expectations for its future. As you weigh those views, keep in mind that Sezzle’s growing exposure to first time borrowers and the associated credit loss risk may have a meaningful influence on how sustainably the business can perform over time.

Explore 17 other fair value estimates on Sezzle - why the stock might be worth over 3x more than the current price!

Build Your Own Sezzle Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

  • A great starting point for your Sezzle research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
  • Our free Sezzle research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Sezzle's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.