Should You Buy, Hold or Sell Sezzle Stock Before Q2 Earnings?

For the current year, the Zacks Consensus Estimate for Sezzle’s revenues is pegged at $592.59 million, indicating a rise of 31.60% year over year. The consensus mark for 2026 EPS stands at $5.10, calling for a significant expansion of 42.06% from the year-ago period. 

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Over the trailing four quarters, the company’s EPS surpassed the Zacks Consensus Estimate on each occasion, the average beat being 17.39%. This is depicted in the graph below:

Here Is What Our Quantitative Model Predicts for SEZL

Our proven model does not conclusively predict an earnings beat for Sezzle this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here. 

SEZL has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

What Should Investors Expect From Sezzle’s Q2 Results?

Sezzle heads into its second-quarter 2026 earnings with momentum, but the question is whether strength continued beyond the seasonally favorable first quarter. Higher purchase frequency, subscriber growth and merchant use are expected to have supported gross merchandise volume (GMV). The consensus mark for GMV is pegged at $1.2 billion, well ahead of the $927 million experienced in the year-ago quarter. Continued engagement with subscription products could have strengthened repeat usage and transaction growth.

Revenue growth is also likely to have remained healthy. Sezzle raised its full-year outlook after first-quarter revenues climbed 29.2%, helped by higher engagement. The second quarter is expected to have benefited from continued subscriber gains, expanding use of the Earn tab and broader adoption of Pay-in-5, which carried higher average order values in April. Easier year-over-year revenue-yield comparisons may also have supported growth.

Credit performance will be important. First-quarter loss provisions were unusually low because of seasonal collection benefits and adjustments. In the second quarter, rising new-user activity and greater Pay-in-5 volume are expected to have pressured provisions. The normalization is likely to have affected margins in the quarter under review, even if repayment trends remained healthy.

Marketing spending is another field to watch. Management planned to raise investment when acquisition returns remained attractive, which may have constrained margin expansion. However, a payback period below six months and subscriber-focused campaigns could have strengthened customer growth, while AI-supported service may have offset expense pressure.

Funding costs may have benefited from refinancing Sezzle’s receivables facility during May, potentially reducing interest expense for part of the quarter. Still, lower seasonal revenue yield versus the first quarter could have hurt profitability comparisons.

SEZL’s Price Performance & Valuation

SEZL’s strong share-price run has raised investor expectations. In a fintech sector where PayPal Holdings, Inc. PYPL and Shift4 Payments, Inc. FOUR continue to command significant attention, the market is increasingly favoring companies that deliver consistent, disciplined execution.

Over the past three months, SEZL has surged 106%, well ahead of its industry’s growth of 14.5% and the S&P 500 composite’s 2.5% gain. Meanwhile, peers like PayPal Holdings and Shift4 Payments have risen 26.5% and 29.7%, respectively.

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Valuation remains the concern. After SEZL’s substantial run-up, expectations are elevated, leaving little room for anything less than consistently strong quarterly results. The stock trades at 8.75X forward 12-month sales per share versus 5.34X for the Zacks sub-industry. The stock is no longer cheap, but it looks fair for a fintech growing revenues around 30% to 35% and producing strong adjusted EBITDA. 

On the other hand, PYPL trades at 1.42X forward 12-month sales per share, while FOUR trades at 1.61X forward 12-month sales per share.

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How to Play Sezzle Stock Ahead of Q2 Earnings?

Sezzle’s second-quarter setup supports a constructive investment view. Rising subscriber engagement, higher purchase frequency and wider adoption of Pay-in-5 are expected to have supported GMV and revenue growth, while the focus on repeat users is expected to have improved revenue visibility. Marketing spending and normalization in credit provisions are likely to have affected margins in the quarter under review, but efficient customer acquisition, AI-led operating leverage and lower funding costs may have limited the pressure. 

The company’s raised 2026 outlook also points to confidence in continued execution. Although second-quarter profitability may not match the seasonally strong first quarter, Sezzle’s growth profile, disciplined underwriting and expanding consumer ecosystem create an attractive risk-reward balance. It seems prudent for investors to consider adding SEZL shares at current levels for potential upside.

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This article originally published on Zacks Investment Research (zacks.com).

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