Sezzle (NASDAQ:SEZL) vs. WEX (NYSE:WEX) Critical Contrast

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

Analyst Recommendations

This is a breakdown of recent ratings for Sezzle and WEX, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sezzle	0	0	2	1	3.33
WEX	0	6	6	1	2.62

Sezzle presently has a consensus target price of $366.00, indicating a potential upside of 38.08%. WEX has a consensus target price of $228.64, indicating a potential upside of 32.12%. Given Sezzle’s stronger consensus rating and higher possible upside, research analysts plainly believe Sezzle is more favorable than WEX.

Volatility and Risk

Sezzle has a beta of 9.23, meaning that its stock price is 823% more volatile than the S&P 500. Comparatively, WEX has a beta of 1.57, meaning that its stock price is 57% more volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sezzle	$221.81 million	6.70	$7.10 million	$9.40	28.20
WEX	$2.66 billion	2.59	$266.60 million	$7.88	21.96

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sezzle	25.29%	101.18%	18.90%
WEX	12.45%	31.35%	3.92%

Insider & Institutional Ownership

2.0% of Sezzle shares are held by institutional investors. Comparatively, 97.5% of WEX shares are held by institutional investors. 57.7% of Sezzle shares are held by company insiders. Comparatively, 1.1% of WEX shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Sezzle beats WEX on 10 of the 14 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 WEX

WEX Inc. operates a commerce platform in the United States and internationally. The Mobility segment offers fleet vehicle payment solutions, transaction processing, and information management services; and provides account activation and account retention services; authorization and billing inquiries, and account maintenance services; account management; credit and collections services; merchant services; analytics solutions; and ancillary services and offerings. This segment markets its products directly and indirectly to businesses and government agencies with fleets of commercial vehicles; and indirectly through co-branded and private label relationships. The Corporate Payments segment provides payment solutions, including embedded payments; and accounts payable automation and spend management solutions. This segment also markets its products directly and indirectly to customers in travel, fintech, insurance, consumer bill pay, and media verticals. The Benefits Solutions segment offers software-as-a-service (SaaS) platform for consumer directed healthcare benefits and full-service benefit enrollment solutions. In addition, its SaaS platform includes embedded payment solutions and plan administration services for consumer-directed health benefits; COBRA accounts; and benefit enrollment and administration services. Further, it offers custodial and depository services for health savings accounts; and markets its products through third-party administrators, financial institutions, payroll providers, and health plans. The company was formerly known as Wright Express Corporation and changed its name to WEX Inc. in October 2012. WEX Inc. was founded in 1983 and is based in Portland, Maine.