Head to Head Analysis: Sezzle (NASDAQ:SEZL) & FirstCash (NASDAQ:FCFS)

FirstCash (NASDAQ:FCFS) and Sezzle (NASDAQ:SEZL) are both mid-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

80.3% of FirstCash shares are held by institutional investors. Comparatively, 2.0% of Sezzle shares are held by institutional investors. 14.8% of FirstCash shares are held by company insiders. Comparatively, 49.5% of Sezzle shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for FirstCash and Sezzle, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FirstCash	0	2	4	1	2.86
Sezzle	0	2	2	0	2.50

FirstCash presently has a consensus target price of $167.00, indicating a potential downside of 0.81%. Sezzle has a consensus target price of $126.25, indicating a potential upside of 86.10%. Given Sezzle’s higher probable upside, analysts clearly believe Sezzle is more favorable than FirstCash.

Volatility and Risk

FirstCash has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, Sezzle has a beta of 8.69, suggesting that its stock price is 769% more volatile than the S&P 500.

Earnings and Valuation

This table compares FirstCash and Sezzle”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FirstCash	$3.49 billion	2.13	$258.82 million	$6.93	24.29
Sezzle	$271.13 million	8.54	$78.52 million	$3.23	21.00

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
FirstCash	8.88%	17.44%	7.92%
Sezzle	27.66%	90.06%	34.22%

Summary

FirstCash beats Sezzle on 8 of the 15 factors compared between the two stocks.

About FirstCash

FirstCash Holdings, Inc, together with its subsidiaries, operates retail pawn stores in the United States, Mexico, and rest of Latin America. The company operates in three segments: U.S. Pawn, Latin America Pawn, and Retail POS Payment Solutions segments. Its pawn stores lend money on the collateral of pledged personal property, including jewelry, electronics, tools, appliances, sporting goods, and musical instruments; and retails merchandise acquired through collateral forfeitures on forfeited pawn loans and over-the-counter purchases of merchandise directly from customers. The company also provides retail POS payment solutions, which focuses on LTO products and facilitating other retail financing payment options across the network of traditional and e-commerce merchant partners. It serves cash and credit-constrained consumers. The company was formerly known as FirstCash, Inc and changed its name to FirstCash Holdings, Inc. in December 2021. FirstCash Holdings, Inc was incorporated in 1988 and is headquartered in Fort Worth, Texas.

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.