Sezzle and Zip share price: Investors anxious as upcoming results loom

Sezzle, Zip share prices dip heading into results

There’s a lot at stake this week for the buy now pay later (BNPL) sector, with Australia’s three most prominent BNPL companies – Afterpay, Zip and Sezzle – all set to provide interim or full-year result updates to the market.

To start the week off, rising interest rate fears saw investors abandon risk assets at a rapid click, with stocks boasting lofty valuation coming under particular pressure.

The BNPL complex is one sector that has faced significant selling pressure over the last few sessions, with the Afterpay share price down over 10% since Monday. Both Sezzle and Zip have also experienced share price declines in that period, with both stocks trading in the red on Wednesday.

Read our preview of Afterpay's interim results here.

Visibility high heading into results

Importantly, the market has significant visibility over both Zip and Sezzle’ recent operational – with both companies recently releasing Q2 and Q4 results to the market.

Starting with Zip, in late January the company released its second quarter (Q2) update to the market. Here the company reported record second quarter revenues, transaction volumes and customer-related statistics.

Zip's MD and CEO described these results as 'another exceptional set of numbers', arguing that they confirmed the company's 'position as one of the fastest growing players in the sector.'

Despite that, investors will likely be keen to gain a more holistic view of the company's financial performance across the half, including gross profit performance, expenditure figures, and any loss and/or profit figures.

Zip is set to release its interim results for the half ending 31 December 2020 tomorrow (Thursday), 25 February. The company will host a conference call at 11:00AM on the day of the results.

The story is much the same with Sezzle, given that the company reported its fourth quarter (Q4) results at the end of January.

Also like Zip, Sezzle reported a blockbuster set of results -- at least when it came to top-line growth -- revealing that underlying merchant sales were up 205.4% (YoY), while merchant fees rose an impressive 195.% (also YoY).

As with many companies in the BNPL space, growth looks to be the name of the game, with Sezzle's CEO Charlie Youakim, saying 'We are very excited about our momentum as December's UMS outpaced November's for the first time in the Company's history. Further, each month throughout 4Q20 represented new records for UMS, Active Consumers, Active Merchants, and Repeat Usage.'

Despite that impressive top-line performance, as with Zip, investors will likely be keen to gain more detail on the company’s overall financial performance for the full-year. With the company touting strong momentum, the market is also likely keen to receive any commentary around Sezzle’s operational performance in the first quarter of CY21.

Sezzle will release its 2020 annual report this Friday, 26 February.

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