Paysafe (NYSE:PSFE) and Sezzle (NASDAQ:SEZL) Critical Contrast

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sezzle	27.66%	90.06%	34.22%
Paysafe	-7.35%	11.68%	1.99%

Analyst Ratings

This is a breakdown of current ratings and price targets for Sezzle and Paysafe, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sezzle	0	3	2	0	2.40
Paysafe	3	3	1	0	1.71

Sezzle presently has a consensus target price of $126.25, indicating a potential upside of 70.29%. Paysafe has a consensus target price of $10.26, indicating a potential upside of 25.89%. Given Sezzle’s stronger consensus rating and higher possible upside, research analysts plainly believe Sezzle is more favorable than Paysafe.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sezzle	$418.63 million	6.05	$78.52 million	$3.23	22.95
Paysafe	$1.70 billion	0.29	$22.16 million	($2.16)	-3.77

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

Risk and Volatility

Sezzle has a beta of 8.69, suggesting that its share price is 769% more volatile than the S&P 500. Comparatively, Paysafe has a beta of 1.73, suggesting that its share price is 73% more volatile than the S&P 500.

Institutional & Insider Ownership

2.0% of Sezzle shares are held by institutional investors. Comparatively, 54.4% of Paysafe shares are held by institutional investors. 49.5% of Sezzle 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 Paysafe on 12 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 Paysafe

Paysafe Limited provides end-to-end payment solutions in the United States, Germany, the United Kingdom, and internationally. Its payments platform offers a range of payment solutions comprising credit and debit card processing, digital wallet, eCash, and real-time banking solutions for entertainment verticals, such as iGaming, including online betting related to sports, e-sports, fantasy sports, poker, and other casino games, as well as travel, streaming/video gaming, retail/hospitality, and digital assets. The company operates through two segments, Merchant Solutions and Digital Wallets. The Merchant Solutions segment offers PCI-compliant payment acceptance and transaction processing solutions for merchants and integrated service providers, including merchant acquiring, transaction processing, gateway solutions, fraud and risk management tools, data and analytics, point of sale systems, and merchant financing solutions, as well as comprehensive support services under the Paysafe and Petroleum Card Services brands. The Digital Wallets segment offers digital wallet solutions under the Skrill, NETELLER, paysafecard, and Paysafecash brands; and pay-by-bank solutions under the Rapid Transfer brand. It also provides eCash solutions under the paysafecard and Paysafecash brands; paysafecard prepaid Mastercard that can be linked to a digital paysafecard account and used to make purchases; Safetypay, a platform that enables eCommerce transactions; and PagoEfectivo, an alternative payment platform. The company is based in London, the United Kingdom.