The Sezzle Inc (ASX: SZL) share price has risen by around 35% during February so far.
Indeed, many businesses within the buy now, pay later industry have been performing strongly including Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and Humm Group Ltd (ASX: HUM).
The company has made a few different announcements over the last couple of months, including its 2020 fourth quarter update.
What did Sezzle announce recently?
In the fourth quarter of 2020, Sezzle said that underlying merchant sales (UMS) grew by 40.6% quarter on quarter, or 205.4% year on year, to A$419.8 million despite all the impacts of COVID-19.
Sezzle's merchant fees grew by 32.6% to A$22.5 million quarter on quarter, it represented year on year growth of 195.6%. However, the merchant fees as a percentage of UMS was 5.4%, which was down 32 basis points quarter on quarter and down 18 basis points year on year.
The company also continues to add a large number of consumers and merchants. Active consumers went up 143.9% year on year to 2.23 million and active merchants rose 166.6% year on year to 26,690.
The final statistic that Sezzle reported was that the active consumer repeat usage improved again to 89.8%, up 75 basis points quarter on quarter and up 608 basis points year on year.
The next announcement that Sezzle made was the signing of a US$250 million receivables warehouse facility with Goldman Sachs and Bastion to support the expansion of the company's business in the US and Canada.
Sezzle's new 28-month facility helps the company's balance sheet, replaces its US$100 million receivables facility and extends Sezzle's funding facility well into 2023. Its existing facility's maturity was May 2022. This new facility will also lower the company's cost of funding, which will provide a positive effect on Sezzle's net transaction margin over time.
The final announcement was that Sezzle signed an agreement with Discover that will allow Sezzle to work with selected merchants on the Discover Global Network in offering consumers additional payment options. Discover is a digital banking and payments services company. The Discover Global Network has more than 48 million merchant acceptance locations and two million ATM and cash access locations around the world.
Is the Sezzle share price a buy?
Sezzle shares are currently rated as a buy by broker Ord Minnett.
The broker thinks that Sezzle has been a leader in the ASX buy now, pay later industry for a while. Sezzle has been benefiting from good network effects as well as continuing strong uptake from customers.
Ord Minnett rates the Sezzle share price as a buy. However, the target share price is $11 for Sezzle, which means the current upside is in low single digits in the broker's view.
