Sezzle's On-Demand Push: Can It Win More Enterprise Merchants?
Sezzle Inc. SEZL is using its On-Demand offering to strengthen its push for enterprise merchants, particularly those seeking more competitive buy now pay later (BNPL) pricing. The product allows non-subscribers to use Sezzle at online and in-store merchants, with a finance charge added to the initial down payment. Management said a key objective of On-Demand is to help win merchants with thinner margins.
The strategy appears to be gaining traction. Management described Sezzle’s enterprise partnership funnel as “a lot stronger” than six months or a year earlier and attributed part of the improvement to On-Demand. Recent enterprise additions include Poshmark, Gymshark, Debenhams, Brookshire’s Food & Pharmacy and RockAuto.com.
On-Demand also gives Sezzle greater flexibility in structuring merchant deals. The company can offer more competitive pricing while considering the potential lifetime value of consumers who may later become subscribers. This creates a potential funnel from an enterprise merchant to an On-Demand checkout user and eventually to deeper Sezzle engagement and subscription conversion.
The opportunity is supported by strong consumer engagement. In the second quarter, transactions rose 32.4% year over year, purchase frequency increased to 7.2 times from 6.1 times, and repeat usage reached 97.2%. Monthly On-Demand & Subscribers climbed 31.3% to 982,000.
Still, enterprise sales cycles remain long, which could limit the pace of merchant additions. Even so, On-Demand provides Sezzle with another tool to compete for large merchants while potentially creating a pathway to higher-value subscription relationships.
How SEZL’s Competitors Are Faring
Affirm Holdings AFRM is a major U.S. BNPL competitor offering Pay-in-4 and longer-term installment loans. For the fiscal fourth quarter ended June 30, 2026, Affirm reported $14.1 billion in gross merchandise value, up from $10.4 billion a year earlier. Active consumers rose to 27.8 million and active merchants to about 570,800. Quarterly revenues were $1.17 billion.
Block Inc. XYZ competes through Afterpay, which is integrated with Square and Cash App. In second-quarter 2026, Block reported $3.17 billion in gross profit, up 25% year over year. Cash App gross profit rose 31% to $1.97 billion, while Cash App had 59 million monthly transacting actives in June. Commerce enablement volume, which includes BNPL activity, increased 17% to $56.5 billion, while consumer lending originations grew 59% to $18.9 billion.
SEZL’s Price Performance, Valuation & Estimates
Shares of Sezzle have outperformed both the broader industry and the S&P 500 Index over the past six months.
Image Source: Zacks Investment Research
From a valuation standpoint, Sezzle shares have a Value Score of C. In terms of forward 12-month Price/Sales, SEZL stock is trading at 5.04X, which is at a premium to the Zacks Financial Transaction Services Market industry’s 4.79X.
Image Source: Zacks Investment Research
Sezzle’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised upward to $5.24 in the past two months. The consensus estimate for the metric indicates a year-over-year increase of 46%.
Image Source: Zacks Investment Research
Sezzle currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This innovative software-as-a-service firm upped its user base +22% year over year. That rate is increasing and margins are expanding as AI efficiencies take effect. Of course, all our elite picks aren't winners, but this one could far surpass earlier Zacks' Stocks Set to Double like D-Wave Quantum, which shot up +680.1%.
Free: See Our Top Stock And 4 Runners UpSezzle Inc. (SEZL) : Free Stock Analysis Report
Affirm Holdings, Inc. (AFRM) : Free Stock Analysis Report
Block, Inc. (XYZ) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
