We recently compiled a list of the 10 Hot New Stocks to Buy Now. In this article, we are going to take a look at where Sezzle Inc. (NASDAQ:SEZL) stands against the other hot new stocks.
According to a report published by EY on January 15, the IPO activity in the United States remained strong in 2024 and is expected to continue at an accelerated pace in 2025. The market made a significant recovery last year. This recovery was both in terms of the number of IPOs and the proceeds raised when compared to 2023. While the number of IPOs increased 38% year-over-year, the proceeds rose 48% during the same time. The report further highlighted that around 20 deals raised more than $500 million, whereas, seven deals stood out by topping $1 billion. During the fourth quarter of 2024 alone, the proceeds almost doubled year-over-year, driven by a single deal that raised $1.7 billion, around 30% of the overall proceeds from Q4 2023.
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During the last year, 176 IPO deals led the total proceeds for the year to $33 billion. The healthcare technology and media and telecommunication sectors were the key leaders for the US IPO activity as these sectors accounted for around 61% and 49% of the overall proceeds. Moreover, companies with advancements in artificial intelligence technology were found to be significant attention gainers among investors. Looking ahead, the report predicts continued growth for the IPO market, with substantial success for companies with proven AI-driven results. In addition, cross-border IPOs also came under the spotlight as they accounted for around 64% of the deals conducted in Q4 2024, with two non-US companies making it to the top 10 largest deals of 2024.
Our Methodology
To curate the list of 10 hot new stocks to buy now we conducted our initial research using the Finviz stock screener. We searched for companies that went public in the last 2 years and then sorted the list by their past 6 months performance. Next, we cross-checked the past 6 months’ performance from Google and the analyst upside potential for each stock sourced from CNN. Lastly, we ranked the stocks based on the number of hedge fund holders as per Insider Monkey’s Q4 2024 database. Please note that the data was collected on February 18, 2025.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An individual using a laptop to access the fintech platform to manage their finances.
Sezzle Inc. (NASDAQ:SEZL)
6-Months Performance: 166.86%
Analyst Upside Potential: 6.19%
Number of Hedge Fund Holders: 19
Sezzle Inc. (NASDAQ:SEZL) is a financial technology company that provides “buy now, pay later” services. It allows customers to split purchases into smaller installments, typically four interest-free payments, and makes money by collecting processing fees from merchants. It aims to empower consumers, especially Gen Z and Millennial customers, by providing tools to manage spending and promote financial independence.
The stock has been under the spotlight for its impressive gains in 2024. Sezzle Inc. (NASDAQ:SEZL) has been growing its subscriber count, which reached 529,000 in the fiscal third quarter of 2024 after rising by 67,000 in a single quarter. As a result, the revenue increased 71.3% year-over-year, with margins at 22.1%. Its ‘Pay-in-4’ product is gaining traction as it allows customers to use Sezzle anywhere Visa is accepted, even without a subscription.
On January 16, Michael Grondahl, an analyst at Northland Securities, maintained a Buy rating on the stock with a price target of $360. The consensus of analysts rating provides a 6.19% upside from the current levels making Sezzle Inc. (NASDAQ:SEZL) a hot new stock to buy now. Looking ahead, management has raised its full-year guidance for 2024 and now expects net income to be around $71.5 million against the previous guidance of $55 million.
Overall SEZL ranks 7th on our list of the hot new stocks to buy now. 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.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
