DAVE vs. SEZL: Which Fintech Stock Is Poised Well for Growth Now?

Both Dave DAVE and Sezzle SEZL are excellent fintech companies that target consumer-oriented payments and provide banking alternatives. While DAVE focuses on cash advances, SEZL offers interest-free installment plans at online stores. Both stocks are valuable players within the global fintech market, projected to be worth $395 billion in 2025, as estimated by Fortune Business Insights.The analysis hereunder will help investors determine which of these stocks has a more optimistic growth trajectory.The Case for SEZLSezzle’s financial performance in the second quarter of 2025 was outstanding, with a record-breaking year-over-year gross merchandise volume (GMV) surge of 74.2% to $927 million. The upsurge in GMV resulted in a whopping 76.4% year-over-year rally in revenues. This improvement in the top line can also be attributed to a 13.7% sequential rise in Monthly On-Demand & Subscribers (MODS) and a 62.6% year-over-year upsurge in the number of transactions.This remarkable performance is a testament to the company’s strategic focus on customer engagement. A significant rise in purchase frequency to 6.1 during the recently reported quarter from the year-ago quarter’s 4.8 further proves the effectiveness of the company’s successful customer engagement strategy. The uptrend in this metric is evidence of the fact that customers often indulge in regular spending habits with DAVE rather than engaging in a one-off transaction.Sezzle’s ability to draw in customers is tied to its ability to boost its marketing spend year over year by a whopping 780% during the recently reported quarter, which has further boosted its operating income by 116.1%, testifying to its ability to scale effectively. In doing so, the company has witnessed 52% growth in monthly active users and a 112% year-over-year upsurge in monthly sessions in the June-end quarter.SEZL’s distinct product strategy provides a significant competitive edge to the company. Sezzle Balance was launched to enhance user engagement and revenue stream diversification. Banking on the company’s ability to attract customers by leveraging its product offerings compels us to anticipate an optimistic turnout in its growth narrative.The Case for DAVEDave’s customer-first strategy has borne its fruits, with its membership base expanding, contributing to its robust financial performance in the June-end quarter. With 722,000 members being added in the second quarter of 2025, monthly transacting members increased 16% year over year. Despite this exponential rally, average customer acquisition costs stood at $19, highlighting the marketing prowess.Banking on this robust customer base expansion, DAVE recorded a 64% year-over-year surge in its top line in the second quarter of 2025. Adjusted EBITDA witnessed a significant uptrend, with the metric skyrocketing 236% year over year to $50.9 million. The company displayed a substantial operational leverage, leading to bottom-line growth of nearly three times.Increasing customer activity has boosted ExtraCash originations by 27% year over year in the June quarter. It has increased the inherent risks of credit default. CashAI, which is the underwriting engine used to assess credit quality, showed promising results over the past few quarters. However, in the recently reported quarter, the 28-day delinquency rate of 2.4% rose 900 basis points from the year-ago quarter. To tackle this situation, the company has announced the complete implementation of CashAI v5.5, promising improved risk mitigation.Competition appears fierce as well, with fintechs like OppFi and PayPal providing comparable services. To maintain a competitive edge, the company will have to invest aggressively, sacrificing the balance to grow and maintain profitability.How Do Estimates Compare for DAVE & SEZL?The Zacks Consensus Estimate for Dave’s 2025 is set at $511.9 million, up 47.5% year over year. For 2025, the consensus mark for earnings is pegged at $10.39 per share, suggesting a 98.3% upsurge from the year-ago quarter’s actual. Over the past 60 days, two estimates for 2025 have shifted upward, with no downward revisions. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Sezzle’s 2025 sales is pinned at $442.1 million, implying a 63.1% year-over-year rally. The consensus estimate for earnings is pegged at $3.27 per share, suggesting a 77.7% jump from the year-ago quarter’s actual. One estimate for 2025 has moved north in the past 60 days versus no southward revisions. Image Source: Zacks Investment Research DAVE Trades Cheaper Than SEZLSezzle is currently trading at a forward 12-month price/earnings ratio of 21.56X, which is lower than the 12-month median of 22.59X, indicating undervaluation. Dave looks undervalued as well, with its 12-month price/earnings ratio of 19.48X, which is below the 12-month median of 30.08X. This comparison highlights the fact that Dave has a discounted valuation than Sezzle. Image Source: Zacks Investment Research VerdictSEZL’s record-breaking GMV and impressive top line support a positive growth narrative. Solid user engagement, evidenced by higher purchase frequency and improved MODS, aids the upward trajectory. Despite exponential growth in marketing expenses, the company recorded significant growth in operating income, suggesting scalability. This potent combination of rapid growth and scalability makes SEZL a buy, as its valuation looks discounted considering the earnings potential that the company’s current momentum implies.DAVE’s growth trajectory can be compromised by the rising inherent risk of credit default despite its AI-led credit management technology. Furthermore, fierce competition affects the company’s ability to maintain growth and profitability within the fintech domain. Hence, we urge investors to be cautious and refrain from buying this stock until the company can demonstrate the sustained ability to sail through these headwinds.SEZL has a Zacks Rank #2 (Buy) and DAVE carries a Zacks Rank #3 (Hold) at present. 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Click to get this free report Dave Inc. (DAVE): Free Stock Analysis Report Sezzle Inc. (SEZL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks