SEZL: 43.1% TTM Growth, 0.55 PEG — Record Subscribers and a Restated Cash-Flow Statement
Sezzle clears this week's small-cap screen with 43.06% TTM revenue growth, a displayed 0.55 PEG and $275.60M of trailing operating cash flow, while guided second-half growth of about 30%, a restated cash-flow statement and a float that is a quarter short set the diligence tests.
Sezzle (NASDAQ: SEZL) cleared all four hard filters in this week's small-cap screen. The Minneapolis buy-now-pay-later platform reported 43.06% trailing-twelve-month revenue growth on $531.89 million of revenue, a displayed PEG of 0.55, positive trailing operating cash flow of $275.60 million, and a $3.75 billion market capitalisation at the September 25, 2026 close. 12
The screen is a Finviz query run one market-cap bucket at a time for market caps under $10 billion with a PEG below 1 and quarterly sales growth above 30%. The quarterly figure is a proxy, and the trailing-twelve-month test is verified name by name. 3
The pass is the easy part. Management guided second-half revenue growth to roughly 30% from the 51.65% just reported, the company restated its cash-flow statements and disclosed a material weakness in the controls over them, and just under a quarter of the shares available to trade are sold short. Each of those three is measurable from the filings, and together they decide whether Sezzle is a watchlist name or a pass.
1. Quantitative screen verification
| Metric | Hard screen filter | SEZL observed value | Status | Data source and measurement basis |
|---|---|---|---|---|
| Market capitalisation | Under $10.0B | $3.75B | Pass | StockAnalysis SEZL statistics (33.68M shares outstanding against the September 25, 2026 close of $111.38; Finviz shows $3.75B on 33.66M shares) |
| TTM revenue growth | Above +30.0% | +43.06% | Pass | StockAnalysis SEZL revenue ($531.89M for the twelve months ended June 30, 2026) and Finviz ("Sales Y/Y TTM" of 43.06%); both trace to the SEC Form 10-Q |
| PEG ratio | Under 1.00 | 0.55 (Finviz) | Pass (source-sensitive) | Finviz SEZL snapshot — forward P/E divided by projected five-year EPS growth: 16.68 ÷ 30.32% = 0.55. StockAnalysis statistics lists PEG at 0.07 on its own basis |
| Operating cash flow (TTM) | Above $0.00 | +$275.60M | Pass | StockAnalysis SEZL cash flow; $141.23M of it was generated in the six months to June 30, 2026, per the SEC Form 10-Q |
The trailing revenue figure is reproducible from the filings: fiscal 2025 revenue of $450.28 million plus first-half 2026 revenue of $285.22 million, less first-half 2025 revenue of $203.61 million, gives $531.89 million. The same sum a year earlier gives $371.79 million, and $531.89 million against that base is +43.06%. 245
How the PEG of 0.55 is built
Finviz works from forward earnings. Sezzle's forward P/E of 16.68 divided by a projected five-year EPS growth rate of 30.32% yields 0.55, and the same arithmetic reproduces the peer numbers in Section 4. 6
A reader working from trailing earnings lands somewhere else. Sezzle's trailing P/E is 24.49 against trailing EPS of $4.55, and that $4.55 is 109% above the $2.18 earned across the four quarters to June 2025; the same division gives roughly 0.22. 14 StockAnalysis's own PEG of 0.07 is a third basis again. All three sit under the filter's 1.00 ceiling, and each rests on a different growth rate, which is worth knowing before Sezzle is compared with anything else.
What the operating cash flow is made of
This is the filter worth reading closely, because Sezzle restated the statements it rests on. The company restated its consolidated cash-flow statements for the six months ended June 30, 2025 in its 2025 annual report, and the June 2026 Form 10-Q carries the restated comparatives; the restatement addresses the classification of cash flows on notes receivable. 5
The Form 8-K filed on March 20, 2026 records what the auditors concluded. Baker Tilly's report on the effectiveness of internal control over financial reporting as of December 31, 2025 stated that Sezzle had not maintained effective internal control, because of a material weakness in the design and maintenance of controls used to evaluate the classification of cash flows related to notes receivable. The audit opinions on the financial statements themselves were unqualified, the company reported no disagreements with Baker Tilly, and it engaged PricewaterhouseCoopers for the fiscal year ending December 31, 2026. 7
On the restated basis the cash is real. The first half of 2026 produced $141.23 million of operating cash flow against $75.54 million a year earlier. Net income of $92.07 million supplies most of it, with $44.28 million of credit-loss provisions and $20.70 million of other credit-loss provisions added back, and $31.08 million absorbed by other operating assets. The consumer loans sit in the investing section, where purchases and originations of notes receivable consumed $77.93 million net of repayments. 5
Rolling the same filings forward gives the trailing figure: fiscal 2025's $209.91 million, plus $141.23 million from the first half of 2026, less the restated $75.54 million from the first half of 2025, equals $275.60 million. 58
2. What Sezzle sells
Sezzle runs a point-of-sale instalment platform. At checkout with a participating merchant, a consumer splits an order into four interest-free payments or five; Sezzle pays the merchant and collects from the consumer. It is a Delaware public benefit corporation headquartered at 700 Nicollet Mall in Minneapolis, and it files as a US domestic issuer. 79
The revenue arrives in two accounting categories, and the split matters for anyone modelling credit cost. 5
| Revenue category | Q2 2026 | Q2 2025 | What it contains |
|---|---|---|---|
| Lending-based income (ASC 310) | $64.96M | $46.69M | Merchant processing fees on orders that become financing receivables, delinquency fees, and consumer fees such as rescheduling instalment dates and using Sezzle On-Demand |
| Revenue from contracts with customers (ASC 606) | $84.72M | $52.02M | Subscription revenue, partner revenue, and certain consumer fees |
| Total revenue | $149.68M | $98.70M |
Of the June 2026 quarter, $54.1 million of lending-based income and $56.2 million of contract revenue came from consumers, against $10.9 million and $28.6 million from merchants and partners respectively. 5
Sezzle funds the loans itself. A wholly owned, bankruptcy-remote special purpose entity takes a portion of the notes receivable and pledges them as collateral for a secured line of credit, and the company keeps servicing everything it sells. Consumer lending also depends on an outside bank: the 10-Q lists reliance on an originating bank partner to originate a substantial majority of the loans on the platform among the risks to its business. 5
The subscription layer is where the recent growth concentrated. Sezzle reported 854,000 active subscribers at June 30, 2026, up 76.4% year over year, and 982,000 monthly on-demand and subscriber accounts, up 31.3%. Across the trailing twelve months, 3.2 million consumers transacted and gross merchandise volume reached $4.6 billion. 910
3. Five quarters of growth, and what bought it
| Metric | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 |
|---|---|---|---|---|---|
| Total revenue | $98.70M | $116.80M | $129.87M | $135.54M | $149.68M |
| Revenue growth (YoY) | +76.35% | +66.95% | +32.22% | +29.19% | +51.65% |
| Net income | $27.60M | $26.67M | $42.69M | $51.30M | $40.77M |
| Diluted EPS | $0.78 | $0.75 | $1.16 | $1.47 | $1.17 |
(Quarterly series from StockAnalysis SEZL financials; the June 2026 and June 2025 revenue, net income, EPS and operating-income figures reproduce the SEC Form 10-Q exactly.)
Two features of that table need explaining. Revenue growth has been uneven — +29.19% in the March 2026 quarter, +51.65% in June — and net income fell 20.5% sequentially even as revenue rose 10.4%.
Start with the uneven growth. In the June 2026 quarter, gross merchandise volume rose 37.9% to $1.3 billion while revenue rose 51.65%, because revenue as a share of GMV climbed to 11.7% from 10.6%. The March quarter ran the other way. Sezzle's finance chief told analysts on the August 6 call that revenue yield had fallen year over year in the first quarter, that the June quarter had the easy comparison, and that yield should run close to 2025's 11.4% for the full year, stepping down sequentially from here with the fourth quarter the seasonal low. 1011
Now the margin. Marketing and advertising cost $19.40 million in the June quarter against $8.77 million a year earlier, and credit-loss provisions $30.61 million against $20.65 million. Those two increases account for most of the sequential rise in operating expenses to $94.72 million, from $66.50 million in the March quarter, on a $14.14 million increase in revenue. The March-quarter expense figure is derived by subtracting the filing's three-month column from its six-month column. 5
Buying subscribers faster is the strategy, and it carries a stated payback. Chief executive Charlie Youakim described the marketing step-up on the call as "pumping the gas" on a cycle whose return takes about six months, and said the company eased off because it wants to watch that return arrive before spending at the same rate again. Active subscribers rose 76.4% on the back of it, the largest year-over-year gain in Sezzle's history, and average purchase frequency reached 7.2 times from 6.1. 1011
The guidance does the arithmetic for the reader. Sezzle raised full-year revenue growth to 35%; against fiscal 2025's $450.28 million that implies about $607.9 million for 2026, and with $285.22 million already booked in the first half the second half implies roughly $322.7 million. Second-half 2025 revenue was $246.67 million, so the implied growth rate is about 30.8%, against +51.65% in the quarter just reported. 210
That gap between the reported quarter and the guide is what moved the shares. Sezzle beat the roughly $136 million revenue consensus by about $14 million and raised guidance for the third time this year, and the stock fell 23% in premarket trading the next morning to about $137.50, with the yield normalisation and the slower second half taking the blame. 12
4. Valuation, anchored to two BNPL peers
| Measure | Sezzle (SEZL) | Basis |
|---|---|---|
| Share price | $111.38 | September 25, 2026 close 1 |
| Trailing P/E | 24.49x | TTM EPS of $4.55 |
| Forward P/E | 18.59x (StockAnalysis) / 16.68x (Finviz) | Vendors' own forward EPS bases 6 |
| P/S (TTM) | 7.05x | |
| P/FCF (TTM) | 13.66x | TTM free cash flow of $274.61M |
| EV/EBITDA (TTM) | 12.02x | |
| Return on equity | 88.85% |
(Valuation measures from StockAnalysis SEZL statistics, except the Finviz forward P/E, all on the twelve months to June 30, 2026.)
A third basis the reader can reproduce: at $111.38 against consensus fiscal 2027 adjusted EPS of $6.65, the forward multiple is 16.7x. Seven analysts poll a consensus Buy with a $168 average target against that close, a range of $150 to $196, last updated August 20, 2026. 13
Affirm and Klarna are the two listed BNPL comparables, and the table below uses one vendor's definitions for all three so the columns mean the same thing. 1415
| Metric | Sezzle (SEZL) | Affirm (AFRM) | Klarna (KLAR) |
|---|---|---|---|
| Market capitalisation | $3.75B | $24.1B | $4.85B |
| Revenue growth, latest reported | +43.06% (TTM to Jun 30, 2026) | +32.40% (FY to Jun 30, 2026) | +26.61% (Q2 2026) |
| Forward P/E | 18.59x | 35.90x | 50.45x |
| EV/EBITDA (TTM) | 12.02x | 43.90x | n/a |
| TTM net margin | 30.35% | 45.29% | −3.52% |
| TTM operating cash flow | +$275.6M | +$1.23B | −$3.78B |
(Affirm's market capitalisation is 337.42 million shares at its $71.52 close; Klarna's is 379.16 million shares at $12.80. Affirm's revenue growth is for the fiscal year it ended on June 30, 2026. 1617 The same source records a $1.44 billion income tax benefit for Affirm in that year, which lifts its net margin far above its 9.79% operating margin.)
Sezzle carries the lowest forward P/E of the three and the lowest EV/EBITDA of the two that have one, on the highest revenue growth rate of the three. The two multiples either side of it are worth naming. Affirm is 6.4 times Sezzle's market capitalisation on slower growth and a 43.90x EV/EBITDA. Klarna reported a $142 million trailing net loss, trades at 50.45x forward earnings against a 348.70% three-year EPS growth forecast, and its shares are down 70.14% over the past 52 weeks after a guidance cut in August. 141518
5. Growth catalysts
The subscriber engine that was just paid for. Active subscribers reached 854,000, up 76.4%, and monthly on-demand and subscriber accounts 982,000, up 31.3%. Purchase frequency of 7.2 times a year is the number that turns a subscriber into revenue, and it rose from 6.1 times. 10
Two products launched into that base. SezzleCash went live in June 2026 — a cash advance for eligible Sezzle Anywhere subscribers, repaid through four or five instalments — and Sezzle Send, a peer-to-peer transfer by phone number that can be funded in full or over five instalments, launched in August. Management told analysts neither is expected to contribute materially in the near term. 1011
Enterprise merchants added in the quarter. Poshmark, Gymshark, Debenhams, Brookshire's Food & Pharmacy, and RockAuto.com joined the network between April and June. 10
A cheaper funding stack. On May 11, 2026 Sezzle replaced its $225 million receivables facility with a three-year, $300 million one led by Mesirow Alternative Credit, cutting the spread by nearly 290 basis points to SOFR plus 3.86%, lifting the advance rate to as much as 92.5%, and lowering the minimum utilisation to $50 million. At June 30 the company had $123.5 million drawn, more than $205 million of liquidity between unrestricted cash and the facility, and total debt at 0.5 times trailing adjusted EBITDA. 1011
Retiring stock. Sezzle repurchased $28.0 million of shares in the first half under a $100 million programme, $3.1 million of it in the second quarter, and shares outstanding are down 0.85% year over year. 110
A national bank charter on file this quarter. Sezzle intends to file its application with the Office of the Comptroller of the Currency by the end of September 2026, having dropped its earlier plan for an industrial loan company charter after new buy-now-pay-later statutes in New York, Illinois and Oregon. Approvals from the OCC, the Federal Reserve and the FDIC are expected to take 12 to 18 months, and the company is spending on the process now. 1119
A claim against Shopify that survived dismissal. Sezzle sued Shopify in June 2025, alleging monopolisation and attempted monopolisation under the Sherman Act and parallel Minnesota claims over buy-now-pay-later options on Shopify's platform. On May 11, 2026 the District Court for the District of Minnesota denied the motion to dismiss in part, and the case is in discovery, expected to run through 2027. Sezzle is the plaintiff, seeking an injunction and damages, which makes the case an option on future value. 511
6. Monitorable risks
1. The second half is guided to grow at half the reported rate. Second-quarter revenue growth was +51.65%; the 35% full-year guide implies about +30.8% for the second half, and revenue yield is guided from 11.7% of GMV back toward 11.4% with the fourth quarter the seasonal low. Trigger: third-quarter revenue below the analyst-calendar consensus of $158.04 million, or a full-year revenue yield below 11.4%. Monitoring horizon: the November report and each subsequent yield disclosure. 1011
2. Credit cost rises through the year by design. The provision for credit losses ran $12.80 million in the March 2025 quarter, $20.65 million in June 2025, $13.68 million in March 2026 and $30.61 million in June 2026 — 2.4% of the quarter's gross merchandise volume, against a full-year target of 2.5% to 3.0%, with the first quarter the seasonal low because of tax-refund season. Trigger: a full-year provision above 3.0% of GMV, or net transaction margin below the 55% floor of the company's 55%–65% target range, which stood at 63.5% in June. New users carry higher loss rates, so faster Sezzle Send adoption adds to the provision. 511
3. A material weakness over the cash-flow line this screen depends on. The FY2025 internal-control opinion was adverse on the classification of cash flows related to notes receivable, the comparative cash-flow statements were restated, and PwC is auditing fiscal 2026. Trigger: an adverse internal-control conclusion in the fiscal 2026 annual report, due around February 2027, or any further restatement of the comparatives. Monitoring horizon: the annual report, plus the controls paragraph of each Form 10-Q. 57
4. The loan book runs on one facility and one bank partner. Notes receivable of $321.16 million at June 30 were funded through a bankruptcy-remote entity pledging them against a $300 million line, with $123.5 million drawn, and lending depends on a third-party originating bank for a substantial majority of loans. Trigger: a drawn balance above $250 million, a cut to the 92.5% advance rate, or a change in the originating-bank arrangement disclosed in an 8-K. Monitoring horizon: quarterly balance sheets and any filing on the facility, whose three-year term runs from May 2026. 510
5. A thin float with a quarter of it borrowed. Float is 18.69 million shares against 33.68 million outstanding, insiders hold 44.47%, and 4.61 million shares are sold short — 13.70% of shares outstanding and 24.68% of the float, with 5.51 days to cover at average volume. The five-year beta is 6.67, and the shares sit 43.1% below their 52-week high of $195.71 while still 29.11% higher than a year ago. Trigger: monthly short interest above 5.5 million shares, or a step-up in volatility without a change in the fundamentals. Monitoring horizon: the twice-monthly short-interest reports and the next two quarterly prints. 16
6. Regulation is moving at the state level faster than the charter can answer. New York passed buy-now-pay-later rules, Illinois enacted a law in June 2026, and Oregon has moved, all while the federal role has narrowed; Sezzle's answer is a national bank charter whose approvals are expected to take 12 to 18 months. Trigger: a state statute taking effect in a jurisdiction that carries a material share of GMV, or the application Sezzle has said it will file this quarter appearing late. Monitoring horizon: the third-quarter report and the OCC's public licensing disclosures. 19
7. Next reporting checkpoint
The third-quarter 2026 report is the next hard test of everything above.
- Estimated report date: November 3, 2026 — an analyst-calendar date rather than a company-confirmed release, and a calendar estimate from a second source puts it on November 4. 1
- Calendar consensus for the quarter: EPS of $1.3022 on revenue of $158,039,820. That revenue line would be 35.3% above the $116.80 million reported in the third quarter of 2025, and the EPS line 73.6% above the $0.75 then reported. 413
Four things to verify in that report:
- Revenue against the second-half implication. The 35% full-year guide implies about $322.7 million across the two remaining quarters; a third quarter at consensus leaves the fourth doing the heavier work.
- Credit inside the guide. Provision as a share of GMV against the 2.5%–3.0% range, and net transaction margin against the 55%–65% band it sat at the top of in June.
- Subscriber growth against the marketing line. Management deliberately moderated spend; subscriber additions and the marketing expense line together say whether the six-month payback it described is holding.
- The bank charter. Whether the OCC application was filed in the third quarter, and what the company says about the cost and timing from there.
8. Watchlist conclusion
Sezzle passes all four hard filters on the sources cited here: a $3.75 billion market capitalisation, 43.06% TTM revenue growth, positive TTM operating cash flow of $275.60 million, and a displayed PEG of 0.55 whose calculation the reader can now reproduce and test. Its profitability is dated and specific — a 27.2% net margin in the June quarter, a 38.8% adjusted EBITDA margin, 88.85% return on equity, and $28.0 million of stock retired in the first half under a $100 million programme.
The offsets are equally specific. Revenue growth is guided to roughly halve in the second half, credit provisions build through the year toward 2.5%–3.0% of GMV, the FY2025 internal-control opinion was adverse over the classification of cash flows on notes receivable, and a thin float carries a quarter of its shares sold short. Those two columns point at different decisions, and this note does not choose between them.
What it fixes is where the evidence shows up next: the November report, the revenue-yield and provision lines in it, the controls paragraph in the next Form 10-Q, and whether the charter application was filed.
Footnote: This publication is for educational, informational, and quantitative screening purposes only. It does not constitute investment advice, financial analysis, or an offer or solicitation to buy or sell any security or financial instrument. Past performance is no guarantee of future results. Investors must perform their own independent due diligence and consult a certified financial professional prior to making investment decisions.
References
- 1StockAnalysis — SEZL statistics
stockanalysis.com
- 2StockAnalysis — SEZL revenue
stockanalysis.com
- 3Finviz — this week's screen
finviz.com
- 4StockAnalysis — SEZL quarterly financials
stockanalysis.com
- 5SEC Form 10-Q, Q2 2026
sec.gov
- 6Finviz — SEZL quote
finviz.com
- 7SEC Form 8-K, March 20, 2026
sec.gov
- 8StockAnalysis — SEZL cash flow
stockanalysis.com
- 9Sezzle investor relations
investors.sezzle.com
- 10Sezzle Q2 2026 results
globenewswire.com
- 11Sezzle Q2 2026 earnings call transcript
assets.ctfassets.net
- 12InvestorsHub — Sezzle shares tumble despite strong quarter
finance.yahoo.com
- 13StockAnalysis — SEZL forecast
stockanalysis.com
- 14StockAnalysis — Affirm statistics
stockanalysis.com
- 15StockAnalysis — Klarna statistics
stockanalysis.com
- 16StockAnalysis — Affirm revenue
stockanalysis.com
- 17StockAnalysis — Klarna revenue
stockanalysis.com
- 18
- 19Payments Dive — Sezzle pivots to national bank charter
paymentsdive.com
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