How Should Investors Value Sezzle After Recent Payment Partnership and Wild Price Swings?
November 4, 2025
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Ever wondered if Sezzle stock is actually good value right now, or if you might be buying into hype? Let’s dig into what’s really behind the numbers.
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Sezzle has seen a rollercoaster of price action lately, with a 92.4% jump over the past year but a sharp 16.0% drop this week and 25.1% decline over the last month, giving plenty for opportunity seekers and risk watchers to consider.
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Recent news is buzzing around competitive moves in the ‘buy now, pay later’ sector and new partnerships that could boost Sezzle’s reach in the U.S. payment ecosystem. These developments have caught investor attention, fueling both optimism about future growth and wariness about rising competition.
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On traditional valuation checks, Sezzle scores a 2 out of 6 which leaves plenty of room for debate and further analysis on how to gauge “fair value.” Next, we’ll work through the main approaches to valuation and, at the end, show you a smarter way to decide if Sezzle’s price really stacks up.
Sezzle scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
The Excess Returns valuation model examines how much profit Sezzle is able to generate from its invested capital above the minimum return required by shareholders. In short, it measures efficiency and profitability relative to the company’s equity base, helping investors judge whether the business is truly creating value over and above what investors expect.
For Sezzle, here are the key inputs from the model:
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Book Value: $3.83 per share
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Stable EPS: $0.23 per share
(Source: Median Return on Equity from the past 5 years.) -
Cost of Equity: $0.05 per share
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Excess Return: $0.18 per share
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Average Return on Equity: 35.50%
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Stable Book Value: $0.65 per share
(Source: Median Book Value from the past 5 years.)
Based on these profitability and efficiency measures, the model estimates Sezzle’s intrinsic value as significantly lower than its current market price. The implied discount suggests the stock is 1247.6% overvalued at the moment.
If you are considering Sezzle at current levels, this approach presents a clear warning that the market price is running far ahead of fundamental returns.
Result: OVERVALUED
Our Excess Returns analysis suggests Sezzle may be overvalued by 1247.6%. Discover 843 undervalued stocks or create your own screener to find better value opportunities.
The Price-to-Earnings (PE) ratio is generally considered the most effective valuation tool for profitable companies, as it directly compares a company’s share price to its net earnings. This metric offers investors a quick way to assess whether a stock is trading cheaply or expensively relative to its earnings power.
A “normal” or “fair” PE ratio isn’t fixed, as higher growth prospects or lower risk often justify premium multiples. In contrast, slower growth or higher risk can lead the market to demand a discount. Economic conditions and industry dynamics also influence what investors are willing to pay for every dollar of earnings.
For Sezzle, the current PE ratio stands at 20.85x. Let’s put that in context:
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Industry average PE (Diversified Financial): 14.76x
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Peer average PE: 26.17x
While Sezzle trades at a premium to its industry, it is below its direct peer group’s average. However, peer and industry comparisons often overlook crucial company-specific factors such as sustained growth momentum, profitability, market cap, and risk profile.
This is where Simply Wall St’s proprietary “Fair Ratio” comes in. It calculates what multiple Sezzle truly deserves by factoring in growth, profit margins, market cap, and sector risks. For Sezzle, the Fair PE Ratio is estimated at 32.94x, which is well above both its actual ratio and industry benchmarks.
Because Sezzle’s current PE is meaningfully below its Fair Ratio, this suggests the market is undervaluing the company’s growth and earnings potential based on a more holistic assessment.
Result: UNDERVALUED
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1410 companies where insiders are betting big on explosive growth.
Earlier, we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is simply your story about Sezzle, tying together your beliefs about how its business will perform, including specific estimates for revenue, earnings, and margins, and what fair value those should drive. Narratives go beyond static valuation formulas by linking your perspective on Sezzle’s prospects directly to a financial forecast, and then to a practical fair value you can compare against today’s price.
On Simply Wall St’s Community page, Narratives make this process accessible and intuitive for every investor. Millions already use them to transform complex numbers into clear, actionable insights. With Narratives, you can easily track when the stock might be too cheap or overpriced as your fair value updates dynamically alongside new earnings, news, or other key events.
For example, some investors may believe Sezzle’s rapid expansion in digital payments and new platform features justify a price as high as $150 per share. Others, focusing on risks like increased credit losses and heavy marketing spend, may set fair value closer to $111. Narratives let you build, update, and compare these perspectives so your investment decisions reflect both the data and your outlook, in real time.
Do you think there’s more to the story for Sezzle? Head over to our Community to see what others are saying!
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.
Companies discussed in this article include SEZL.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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