We recently published a list of 12 Best Multibagger Stocks to Buy in 2025. In this article, we are going to take a look at where Sezzle Inc. (NASDAQ:SEZL) stands against other best multibagger stocks to buy in 2025.
In the world of investing, the term “multibagger” refers to stocks that have the potential to deliver returns several times greater than the original investment. One key factor that can help identify potential multibaggers is momentum. Momentum investing focuses on capitalizing on the continuation of existing market trends. Investors using this strategy look for stocks that are experiencing upward price movements, often driven by strong earnings reports, positive news, industry tailwinds, or overall market sentiment. The idea is simple: “the trend is your friend,” and momentum can be a powerful force in identifying winners before they peak. The importance of momentum has been recognized by famous investors, but many of them emphasized the idea that it is crucial to catch momentum stocks early on. As Warren Buffett put it – “What the wise do in the beginning, fools do in the end”.
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The US market is close to entering a correction mode as the absolute magnitude of decline since the mid-February peak is approaching 10%. The current policies of the new US administration, such as tariffs, federal jobs cuts and cuts in some large-scale public projects, are causing havoc among investors as many are fearing a scenario in which the US economy enters stagflation – a period of high inflation among weak economic growth and unemployment. Some analysts have pointed out that sectors reliant on government contracts, such as infrastructure and defense, are already experiencing heightened volatility as a result of these policy shifts. In a recent interview with Maria Bartiromo on Fox News, the President himself refused to rule out a recession in the current year and claimed that the economy is in “a period of transition” and that tariffs might fuel inflation at some point. With consumer confidence showing early signs of weakening, as signaled by recent business surveys, some economists argue that the Federal Reserve may be forced to intervene sooner than expected to stabilize the markets. This idea was already supported by the President, who at some point expressed the opinion that interest rates in the US economy are higher than they should be.
The aforementioned developments have caused a market selloff, particularly in previously high-momentum stocks such as the Magnificent 8, which have benefited from the AI megatrend and were responsible for most of the market returns last year. Prior to that, many previously well-performing stocks, such as government contractors, had already lost their momentum following the election results, while some of the few well-performing healthcare stocks were hit by Medicare/Medicaid reimbursement threats. Likewise, the energy sector remained somewhat out of favor – despite volume tailwinds from Trump 2.0, the expectation of lower oil prices amid a weaker economy has put downward pressure on stock prices in the sector. The key takeaway for investors is that one should look for multibaggers that haven’t yet lost their momentum during the market dip in the last month. These are often lower-capitalization companies that are underfollowed by analysts and operate in high-growth markets.
Our Methodology
To compile our list of multibagger stocks, we used Finviz to filter the companies that have delivered at least 200% stock price return in the last twelve months. Then we compare the list with our proprietary database of hedge funds ownership as of Q4 2024 and include in the article the top 12 names with the highest number of hedge funds that own the stock.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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Sezzle Inc. (NASDAQ:SEZL)
Number of Hedge Fund Holders: 19
Stock Price Return in the last twelve months: 300%
Sezzle Inc. (NASDAQ:SEZL) is a financial technology company that provides buy-now, pay-later services, allowing consumers to split purchases into interest-free installments. It partners with merchants across various industries, including retail, electronics, and fashion, to offer flexible payment solutions at checkout. SEZL’s platform includes features like credit-building programs and budgeting tools to help users manage spending. The company operates primarily in the US and Canada, facilitating transactions through its mobile app and online integrations.
Sezzle Inc. (NASDAQ:SEZL) delivered exceptional financial performance in Q4 2024, with revenue growing more than 100% YoY during the holiday season. The company’s net income increased more than 10-fold compared to 2023 on top-line growth that outpaced the industry. The WebBank partnership launched in September 2024 proved successful, enabling the introduction of the On-Demand product and fee unification across states. Monthly On-Demand & Subscriber users reached 707,000 by December, representing a 130% YoY increase. The company signed three enterprise-level merchants – Backcountry, Bealls, and Rural King – with GMVs ranging from approximately $700 million to over $1.5 billion.
Looking forward to 2025, Sezzle Inc. (NASDAQ:SEZL) anticipates double-digit revenue growth with pretax net income rising at least 55% compared to 2024. The company’s focus remains on maximizing the On-Demand launch and improving shopping experience and engagement in their app. For 2025, the principal loss rate is expected to be in the range of 2.5% to 3% as the company continues to prioritize growth. With a 300% stock price return in the last year, SEZL is one of the best multibagger stocks to buy in 2025.
Overall, SEZL ranks 9th on our list of best multibagger stocks to buy in 2025. While we acknowledge the potential of SEZL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SEZL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
