The Sezzle Inc’s [ASX:SZL] share price action is lukewarm today after the BNPL stock announced its half-year results.
SZL share price is currently exchanging hands at $6.43 a share, up fractionally at 0.16%.
Like other BNPL companies such as Afterpay Ltd [ASX:APT], Sezzle’s product allows consumers to pay for purchases in interest-free instalments.
Sezzle launched onto the market in 2017 and claims it is the ‘highest-shopper-rated’ BNPL company of its kind.
So far, the share price doesn’t seem to be budging on the back of the announcement.
Today, we’ll look at the outlook on Sezzle shares in consideration of this year’s performance.
What was in Sezzle’s announcement?
The director’s report for the half year ending in June 2021 revealed growth in several key metrics.
Underlying merchant sales increased by 156% from US$307.4 million in 1H20 to US$786.2 million in 1H21.
The company also acquired more active merchants, securing contracts with approximately 24,162 more clients. That’s a 150% increase.
Active merchants are defined in the report as merchants who have had transactions with Sezzle in the last 12 months.
On the other end of the dollar bill, there was also growth in Sezzle’s consumer base.
Active consumers saw a 96% increase to 2,883,825 users.
While it’s great to see the company growing, these results are not necessarily as impressive as some investors may have been hoping for.
That could explain the stagnating share price.
Sezzle also reported an after-tax net loss of $30.4 million for FY21, in comparison to an $8.2 million loss for the prior period.
Sezzle bulls may note that BNPL is a relatively new space, and emerging BNPL providers like SZL could enjoy exciting gains down the track as the BNPL space expands.
Is there enough momentum?
It’s no secret that COVID-19 and lockdowns increased online shopping.
It’s possible that because of this trend, investors were expecting better results from the BNPL provider.
And Sezzle has some big competition right now.
Consequently, the company may need to step up its game if it wants more attention from investors…
Now, if you’re looking for stocks at the frontier of innovation and think the BNPL market is saturated, I recommend reading the latest briefing from our market analyst Murray Dawes.
Murray believes he’s found seven small-cap stocks on the ASX right now that could explode in value in 2021.
For Money Morning
PS: Along with your report, you’ll also get a free subscription to Money Morning, an e-letter that has been designed to deliver the most exciting investing opportunities straight to your inbox every day. Click here to subscribe now