Green Dot (NYSE:GDOT) & Sezzle (NASDAQ:SEZL) Critical Survey

Sezzle (NASDAQ:SEZL) and Green Dot (NYSE:GDOT) are both business services companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Valuation & Earnings

This table compares Sezzle and Green Dot”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sezzle	$271.13 million	10.73	$78.52 million	$2.92	29.29
Green Dot	$1.72 billion	0.42	-$26.70 million	($0.44)	-29.69

Sezzle has higher earnings, but lower revenue than Green Dot. Green Dot is trading at a lower price-to-earnings ratio than Sezzle, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations for Sezzle and Green Dot, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sezzle	0	3	3	0	2.50
Green Dot	2	1	2	2	2.57

Sezzle presently has a consensus price target of $113.75, indicating a potential upside of 32.99%. Green Dot has a consensus price target of $13.00, indicating a potential downside of 0.50%. Given Sezzle’s higher probable upside, research analysts clearly believe Sezzle is more favorable than Green Dot.

Profitability

This table compares Sezzle and Green Dot’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sezzle	28.13%	102.90%	34.75%
Green Dot	-1.24%	9.93%	1.66%

Volatility and Risk

Sezzle has a beta of 8.7, indicating that its stock price is 770% more volatile than the S&P 500. Comparatively, Green Dot has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.

Institutional and Insider Ownership

2.0% of Sezzle shares are held by institutional investors. Comparatively, 92.6% of Green Dot shares are held by institutional investors. 49.5% of Sezzle shares are held by company insiders. Comparatively, 1.4% of Green Dot shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Sezzle beats Green Dot on 11 of the 15 factors compared between the two stocks.

About Sezzle

Sezzle Inc. operates as a technology-enabled payments company primarily in the United States and Canada. The company provides payment solution in-store and at online retail stores; and through proprietary payments solution that connects consumers with merchants. It also offers Sezzle Platform that provides a payments solution for consumers that extends credit at the point-of-sale allowing consumers to purchase and receive the ordered merchandise at the time of sale while paying in installments over time; Pay-in-Four, which allows consumers to pay a fourth of the purchase price up front and then another fourth of the purchase price every two weeks thereafter over a total of six weeks; Pay-in-Full that allows consumers to pay for the full value of their order up-front through the Sezzle Platform without the extension of credit; and Pay-in-Two and other alternative installment options, which allow consumer to pay half of the value of their order up-front and the second half in two weeks. In addition, the company provides Sezzle Virtual Card that allows consumers to access the Sezzle Platform in the form of close-end installment loans and shop with merchants that are not integrated with Sezzle; Sezzle Anywhere, a paid subscription service that allows consumers to use their Sezzle Virtual Card at any merchant online or in-store; Sezzle Premium, a paid subscription service that allows its consumers to access large, non-integrated premium merchants; and Sezzle Up, an opt-in feature of the Sezzle Platform. Further, it offers Long-Term Lending through collaboration with third-party lenders and Product Innovation. Sezzle Inc. was incorporated in 2016 and is headquartered in Minneapolis, Minnesota.

About Green Dot

Green Dot Corporation, a financial technology and registered bank holding company, provides various financial services to consumers and businesses in the United States. It operates through three segments: Consumer Services, Business to Business Services, and Money Movement Services. The company provides deposit account programs, including consumer and small business checking account products, network-branded reloadable prepaid debit cards and gift cards, and secured credit programs. It offers money processing services, such as cash transfer services that enable consumers to deposit or pick up cash and pay bills with cash at the point-of-sale at any participating retailer; and simply paid disbursement services, which enable wages and authorized funds disbursement to its deposit account programs and accounts issued by any third-party bank or program manager. In addition, the company offers tax processing services comprising tax refund transfers, which provide the processing technology to facilitate receipt of a taxpayers' refund proceeds; small business lending to independent tax preparation providers that seek small advances; and fast cash advance, a loan that enables tax refund recipients. Green Dot Corporation was incorporated in 1999 and is headquartered in Austin, Texas.