Underappreciated Growth in a Crowded Space: Why Cramer’s Nod Signals a Buy for Sezzle

The buy-now-pay-later (BNPL) sector is a battleground. Competitors like Afterpay, Klarna, and Affirm dominate headlines with aggressive marketing and high valuations. Yet, one under-the-radar player—Sezzle (NASDAQ: SEZL)—is quietly outperforming peers with explosive growth and a strategic edge. Recent Q1 results, coupled with a rare nod from Jim Cramer, suggest this is no fluke. Here’s why investors should act now.

Cramer’s Validation: A Tipping Point for Sezzle?

Jim Cramer’s acknowledgment of Sezzle’s Q3 2024 results was a pivotal moment. Despite ranking it 9th on his watchlist and prioritizing AI stocks over BNPL, Cramer couldn’t ignore the numbers: 71% revenue growth to $70M, net income soaring to $15.4M, and a 40.6% surge in underlying merchant sales. Fast-forward to Q1 2025, and Sezzle has blown past even these achievements.

The Q1 2025 results were a masterclass in execution:
- Revenue surged 123% YoY to $104.9M, driven by its WebBank partnership and increased engagement.
- Net income hit $36.2M, a 2,300% increase from $1.5M in Q1 2024, with operating margins expanding to 47.6%.
- Analysts upgraded price targets to $101, while the stock soared 45% to $85 in late May—a stark contrast to peers like Afterpay (-15% YTD).

Cramer’s muted endorsement may have been overshadowed by his AI fixation, but the data speaks for itself. This is a company primed to capitalize on sector consolidation.

Why Sezzle’s Niche Positioning Wins

The BNPL space is crowded, but Sezzle’s focus on merchant partnerships and cost efficiency sets it apart. While rivals pour capital into customer acquisition, Sezzle is scaling revenue with razor-thin costs:

• Merchant network expansion: Added two enterprise-level partners in Q1 (Shields and WAP.com), boosting U.S. and Canadian GMV to $808.7M.
• Product innovation: Launched Pay-in-5, Money IQ, and Sezzle Balance, enhancing user retention and financial literacy—a unique value proposition.
• Operational excellence: Transaction costs dropped to 3.8% of GMV, versus 4.3% a year ago, thanks to better credit management and the WebBank partnership.

Meanwhile, overvalued peers like Affirm (valuation multiples 4x Sezzle’s revenue growth) face margin pressures. Sezzle’s $120M FY2025 net income guidance (up 50% from prior estimates) underscores its path to profitability.

Regional Expansion: Americas Now, APAC Next

Sezzle’s growth isn’t confined to its home turf. In the Americas, it’s aggressively expanding into new verticals like grocery and bill payments, with partnerships like Scheels (sporting goods) and WHOP (social commerce). While APAC details are sparse in its earnings, the sector’s $925B social commerce market by 2030 (CAGR 8.1%) offers a tailwind.

APAC’s livestream shopping boom (driven by platforms like Xiaohongshu) and 4.1% GDP growth in China create ripe conditions for entry. While Sezzle hasn’t announced APAC moves yet, its lightweight tech infrastructure and merchant-first model position it to replicate U.S. success in regions like Southeast Asia.

Catalysts to Watch: The Perfect Setup

• Q2 2025 results: Likely to show sustained margin expansion and new merchant wins.
• APAC pivot: A delayed but inevitable move, given the region’s BNPL adoption rates (under 10% of global payments).
• Stock repurchases: The $50M buyback program and recent stock split signal confidence in undervalued shares.

Conclusion: A Hidden Gem in a Noisy Sector

Jim Cramer’s lukewarm endorsement of Sezzle masks a compelling truth: this company is executing flawlessly in a fragmented market. With 47% operating margins, a 45% stock surge, and a $101 analyst target, Sezzle is a buy at $85—especially as peers overpay for growth.

The BNPL sector’s consolidation phase will reward companies that prioritize cost control and merchant partnerships over flashy marketing. Sezzle checks both boxes. The time to act is now—before the crowd catches on.

Invest now while the gap between Sezzle’s fundamentals and valuation remains wide.