What Happened?
Shares of buy-now-pay-later service Sezzle (NASDAQCM:SEZL) fell 3% in the afternoon session after news of increased competition in the 'Buy Now, Pay Later' (BNPL) market emerged from major payment players. Global digital payments platform PayPal launched its interest-free "Pay in 4" BNPL solution in Canada, a key market, right before the busy holiday shopping season. This move introduced a significant new competitor for Sezzle. Adding to the pressure, payments platform PPRO also announced a new solution to help merchants access the booming, but increasingly fragmented, European BNPL market. This development highlighted a broader trend of more companies entering the space. The competitive news followed a period of volatility for Sezzle's stock, which had seen a drop after its recent third-quarter results.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Sezzle? Access our full analysis report here.
What Is The Market Telling Us
Sezzle’s shares are extremely volatile and have had 80 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock dropped 8% on the news that investors looked past a strong third-quarter earnings report, focusing instead on rising credit loss provisions, a key executive change, and emerging competition. The company reported impressive results for its third quarter, including a 67% year-over-year revenue increase and its first-ever $1 billion quarter in Gross Merchandise Volume (GMV). Despite these strong headline numbers, the report also revealed that the provision for credit losses increased to 3.1% of GMV, up from 2.3% in the same period a year ago, raising concerns about loan quality. Adding to the uncertainty, the company announced that Chief Financial Officer Karen Hartje agreed to a twelve-month transition out of her role. Concerns were also heightened by news of increased competition, as US Bank partnered with Mastercard to launch a new credit card with features that directly rival buy-now-pay-later models.
Sezzle is up 24.1% since the beginning of the year, but at $56.43 per share, it is still trading 69% below its 52-week high of $182.16 from July 2025. Investors who bought $1,000 worth of Sezzle’s shares at the IPO in August 2023 would now be looking at an investment worth $4,176.
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