The Sezzle Inc (ASX: SZL) share price has been an exceptionally strong performer again on Thursday.
In early afternoon trade the buy now pay later provider's shares are up 29% to $6.34.
At one stage they were up as much as 32% to a new record high of $6.48.
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Why is the Sezzle share price on fire?
Investors have been fighting to get hold of Sezzle's shares this week following the release of a very positive update.
On Tuesday Sezzle released its second quarter update and revealed that its strong underlying merchant sales (UMS) growth had continued.
During the quarter, the Afterpay Ltd (ASX: APT) rival reported UMS of US$188 million (A$272.3 million). This was a 58% quarter on quarter increase and a massive 349% year on year increase.
Management advised that key drivers of this growth were increases in active customers, active merchants, and customer usage.
At the end of the quarter there were 1.48 million active customers and 16,112 active merchants on its platform. This represents a 243% and 219% increase, respectively, over the prior corresponding period.
Pleasingly, these customers were using its platform more frequently than ever before. Repeat usage improved over 10 points year on year to 87.5% for June 2020. This compares to 77.2% in June 2019 and represents its 18th straight month of sequential improvement.
Management appears confident this positive form will continue and provided full year annualised UMS guidance of US$1 billion.
Broker buy rating.
One broker that liked what it saw was Ord Minnett.
In response to this update, the broker reiterated its buy rating and lifted its price target by almost 50% to $5.95.
Ord Minnett made the move after increasing its revenue forecasts to reflect its stronger than expected growth.
However, it is worth noting that the Sezzle share price has now broken through this level. So, this could be a sign that the near term share price gains are coming to an end. Though, given the positive investor sentiment in the buy now pay later industry, anything is possible.
