Buckley Capital flags Sezzle as undervalued amid strong earnings outlook
Sezzle trades at 12.7 times current earnings, well below historical multiples, as Buckley Capital highlights the firm's ability to tighten lending standards to mitigate risk.
Buckley Capital Advisors has identified Sezzle Inc (NASDAQ:SEZL) as a mispriced asset in its first-quarter 2026 investor letter, arguing that the buy-now-pay-later provider offers a compelling valuation relative to its growth trajectory. The investment management firm estimates the company will generate approximately $5.20 per share in earnings this year and $7.00 per share in 2027.
At these earnings levels, Sezzle shares trade at 12.7 times current earnings and less than 10 times next year’s earnings. This valuation stands in stark contrast to historical trading multiples, which have typically ranged between 20 and 25 times forward earnings. Buckley Capital noted that its own purchase price for the stock was $66 per share, projecting an internal rate of return north of 25% driven by both earnings growth and potential multiple expansion.
The firm emphasised that Sezzle’s business model carries lower credit risk than market volatility might suggest. Buckley Capital pointed to the company’s capacity to adjust its lending standards quickly, citing a tightening of credit risk measures implemented in the fourth quarter of 2025. This agility allows the business to manage its book turnover effectively, which the firm argues makes it a high-quality operation with a long growth runway.
Market data reflects recent momentum for the stock, which closed at $118.15 on May 29, 2026, with a market capitalisation of $3.97 billion. Sezzle shares recorded a one-month return of 37.45%, although the 52-week gain stood at 5.00%. Buckley Capital highlighted that the broader buy-now-pay-later sector is expanding at an annual rate of 20%, and the firm believes Sezzle possesses the best business model within the industry.
Institutional interest in the stock has seen a modest uptick, with 25 hedge fund portfolios holding Sezzle at the end of the first quarter, an increase from 23 in the previous quarter. Despite this, Buckley Capital noted that the stock is not among the 40 most popular stocks among hedge funds heading into 2026. The firm concluded that Sezzle is likely to exceed consensus expectations, describing its financial guidance as conservative.
