Sezzle Surges 7.93% – What’s Fueling This Explosive Move?

Summary
• Sezzle’s stock (SEZL) rockets 7.93% intraday, hitting $156.86
• 52-week high at $186.74 looms as key psychological barrier
• Short interest jumps 24.8% in January, now covering 11% of shares
• Institutional buyers like Calamos and JPMorgan boost stakes in Q4
Sezzle’s dramatic intraday rally on July 25 has ignited investor frenzy, with the stock surging to $156.86—a 7.93% spike from its $140.72 open. The move coincides with heightened short interest and recent institutional accumulation, suggesting a brewing battle between bullish catalysts and lingering bearish skepticism. With the BNPL sector gaining momentum and Affirm’s recent profitability spurring sector optimism, the question remains: is this a short-lived bounce or the start of a broader reversal?

Q4 Earnings Optimism Drives Sezzle's Intraday Rally
Sezzle’s explosive move stems from a confluence of short-term catalysts and sector dynamics. The company’s updated FY2024 guidance, which projected adjusted EPS of $9.80 (vs. $9.77 consensus) and $247.1M revenue (vs. $249.2M estimate), signaled improved operational discipline. Simultaneously, institutional investors like Calamos Advisors and JPMorgan Chase increased stakes in Q4, while short-sellers faced a 2.5-day days-to-cover ratio, amplifying potential squeeze risks. Additionally, Northland Securities’ ‘Buy’ rating and the launch of Sezzle’s Money IQ program—aimed at enhancing user engagement—fueled speculative buying. These factors created a perfect storm for a technical breakout, particularly as the stock approached its 200-day moving average of $203.94, triggering stop-loss orders and momentum-driven bids.

BNPL Sector Gains Momentum as Affirm Turns Profitable
The Buy Now, Pay Later sector is witnessing a renaissance, with Affirm (AFRM) recently reporting its first-ever profit, spurring cross-sector optimism. Klarna’s partnership with Poshmark to streamline resale options and its AI-driven product expansion further underscore the sector’s innovation. Sezzle’s rally aligns with this trend, as investors bet on its ability to capture market share against larger peers. While Affirm’s 2.06% intraday gain highlights the sector’s strength, Sezzle’s aggressive 7.93% move suggests it’s being viewed as a high-conviction play. However, Sezzle’s elevated 34.9x P/E ratio versus Affirm’s more moderate valuation indicates it may be trading on speculative momentum rather than fundamentals.

Technical Bull Case Strengthens – ETFs and Options Watch
• 200-day MA: $203.94 (well above current price), suggesting a deep undervaluation
• RSI: 25.14 (oversold), hinting at potential rebound
• MACD: -0.40 (bearish), but crossing above signal line 3.08 could reverse trend
• Bollinger Bands: $118.38–$188.78, with current price near 20% retracement level
Sezzle’s technical setup is a classic short-term bull case. The stock is trading near its 52-week low of $11.67, with RSI in oversold territory and a 7.93% intraday surge suggesting immediate momentum. Key levels to watch include the 30-day support/resistance range of $140.37–$141.39 and the critical 200-day MA at $203.94. While the options chain is absent, leveraged ETFs (if available) would typically play a role here, though none are listed for SEZL. Aggressive bulls should consider tightening stop-losses above $140.72 and target a retest of the $156.86 high before scaling into longer-term positions.

Backtest Sezzle Stock Performance
The backtest of SEZL's performance after an 8% intraday surge reveals favorable short-to-medium-term gains, with the 3-Day win rate at 61.13%, the 10-Day at 68.83%, and the 30-Day at 80.97%. The maximum return during the backtest period was 72.87%, which occurred on day 59, indicating that SEZL tends to continue performing well in the immediate aftermath of a significant price increase.

Sezzle's Rally: A Short-Term Catalyst or Sustainable Trend?
Sezzle’s 7.93% surge is a mix of short-term technical momentum and sector-level optimism, but its sustainability depends on three key factors: (1) whether the $156.86 intraday high holds as a new support level, (2) the outcome of its Q4 earnings report (scheduled Feb 25), and (3) how Affirm’s profitability story translates to Sezzle’s competitive positioning. Investors should monitor the 200-day MA at $203.94 as a critical long-term benchmark, while short-term traders may find opportunities in the $140.37–$141.39 support range. With the BNPL sector showing resilience and Sezzle’s institutional ownership rising, this rally could be a catalyst for a broader re-rating—provided the company can deliver on its guidance. For now, watch the $156.86 level closely; a break above could signal a shift in sentiment.