Definitely in the game
RBC says catalysts to come. We think momentum can continue for SZL through FY21e. Canada's share of sales is increasing, the partnership with Ally Lending to offer longer-term installments will launch (which will be accretive to unit economics), Sezzle Up uptake is growing nicely and we
view this feature as a differentiator for SZL while it also will lower funding costs, and further significant government stimulus is in the pipeline.
RBC says Sezzle is favourite stock in small-cap BNPL: SZL is trading on EV/Sales of 13x June '21e, inline with ZIP at ~14x and a significant discount to APT at ~40x. However, as we show below, on a number of other metrics SZL remains relatively cheap and remains our preferred small-cap BNPL player. Retain Outperform, Spec. Risk rating, PT unchanged at $11.00/share.
