- Diversified Financial
When Will Sezzle Inc. (ASX:SZL) Turn A Profit?
Sezzle Inc. (ASX:SZL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Sezzle Inc. operates as a technology-enabled payments company in United States, Canada, India, and Europe. The AU$153m market-cap company announced a latest loss of US$38m on 31 December 2022 for its most recent financial year result. The most pressing concern for investors is Sezzle's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Sezzle
Consensus from 3 of the Australian Diversified Financial analysts is that Sezzle is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$5.9m in 2025. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 109% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Sezzle's growth isn’t the focus of this broad overview, but, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Sezzle is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
There are key fundamentals of Sezzle which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Sezzle, take a look at Sezzle's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should look at:
- Historical Track Record: What has Sezzle's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Sezzle's board and the CEO’s background.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Valuation is complex, but we're helping make it simple.
Find out whether Sezzle is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Sezzle Inc. operates as a technology-enabled payments company in United States, Canada, India, and Europe.
Excellent balance sheet with reasonable growth potential.