Sezzle Inc.’s SEZL recent merchant additions are giving its engagement story another leg. The company has added enterprise names such as Gymshark, Debenhams, Poshmark and Follett, expanding the number of places where consumers can use its payment products. Management says its On-Demand offering is helping Sezzle compete for merchants with tighter margins, while a more engaged subscriber base is supporting its pitch to larger retailers.
The market has already rewarded that progress. SEZL has significantly outperformed close BNPL peers such as Affirm Holdings, Inc. AFRM and Klarna Group plc KLAR in 2026, reflecting investor confidence in Sezzle’s growth and profitability.
Even so, the stock has pulled back from its highs, keeping the debate open over whether the current valuation still leaves enough room for further gains.
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The bigger question is whether new merchants can translate into deeper customer relationships rather than just more checkout volume. Rising subscription adoption, more frequent purchases and new financial tools suggest Sezzle is becoming useful in more situations. This could support longer customer lifetimes and stronger economics if credit performance and customer-acquisition spending remain disciplined.
Merchant Growth Can Fortify the Engagement Flywheel for SEZL
Adding merchants matters because Sezzle’s model becomes more useful as consumers find more places to transact. Management noted that enterprise sales cycles can be lengthy, but said the pipeline has strengthened and that merchants are increasingly willing to add Sezzle alongside other BNPL providers rather than choose a single platform.
This creates a useful loop. More merchant acceptance can drive higher transaction frequency, while greater customer activity can make Sezzle more attractive to additional merchants. For a smaller platform competing with Affirm and Klarna, that relationship is important because Sezzle cannot rely on scale alone.
The evidence so far points to deeper usage. Active subscribers reached 854,000 at the end of June, up 76.4% from a year earlier, while average quarterly purchase frequency increased to a record 7.2 times from 6.1 times. Repeat usage represented 97.2% of orders, and average quarterly revenue per monetized user rose 16.2%. These numbers matter more as proof of improving customer behavior than as a simple quarterly scorecard.
Sezzle’s New Products Can Deepen Customer Relationships
Sezzle is also trying to give users reasons to return when they are not making a retail purchase. SezzleCash provides eligible Anywhere subscribers with access to short-term liquidity, while Sezzle Send extends the platform into peer-to-peer money transfers.
Early interest has been encouraging. Nearly 10% of eligible new subscribers were using SezzleCash as their first transaction in the Anywhere ecosystem, while Sezzle Send had attracted more than 100,000 users to its waitlist ahead of launch.
These products could make the platform harder to replace. Card-linked offers, cashback, rewards and Sezzle Mobile add further reasons for customers to remain active. This is important in a BNPL market where Affirm and Klarna are also broadening their consumer offerings.
SEZL’s Estimate Revisions Depict a Bright Outlook
Over the past 30 days, earnings estimates for both 2026 and 2027 have been revised upward, signaling a bullish outlook from analysts. These figures also suggest year-over-year growth of 45.96% and 27.10%, respectively.
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Valuation Still Leaves an Opening for SEZL
The stock’s rally has made valuation more important, but Sezzle does not look stretched relative to close peers on forward earnings. SEZL trades at roughly 18.82X forward 12-month price-to-earnings compared with about 32.96X for Affirm and about 41.15X for Klarna.
While the comparison is not exact because the three companies differ in size and business mix, the discount gives Sezzle some room to grow into its valuation if execution remains solid.
Valuation
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The main risks are still credit quality and customer-acquisition efficiency. Management expects provision for credit losses to remain within 2.5%-3% of GMV for 2026 and continues to evaluate marketing spending against a payback period of less than six months. Newer products could increase credit exposure, particularly as they bring in first-time users. Still, if engagement keeps rising without weakening loss performance, earnings growth can remain a meaningful driver of the stock.
What Should Investors Do With SEZL Now?
Sezzle’s newest merchant additions make its engagement story broader and more durable. More places to use the platform can support purchase frequency, while subscriptions, SezzleCash and Sezzle Send create additional reasons for customers to return. The stock’s strong 2026 performance raises the bar for execution, and credit trends need monitoring as the product set expands.
Still, rising engagement, disciplined customer-acquisition economics and a forward earnings multiple below Affirm and Klarna keep the risk-reward profile favorable. For investors comfortable with the volatility of a smaller fintech, the current level presents a reasonable opportunity to build long-term exposure as the company expands its consumer and merchant ecosystem.
At present, SEZL carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).