The Covid-19 vaccine roll out, formal transition to a Biden administration, stimulus expectations, and the prospect of Janet Yellen at the US Treasury have all fed into a powerful story about a possible cyclical recovery in global markets. For investors, that news flow can quickly blur into noise unless it is tied to specific stocks that may benefit or face headwinds. This article cuts through the headlines by drawing on a Cyclical Recovery Stocks screener and profiles 3 stocks that appear positively exposed to the current backdrop. It is designed to help you decide whether they deserve a closer look or a place on your watchlist.

Sezzle (SEZL)

Overview: Sezzle is a Minneapolis based payments company that lets shoppers split purchases into short term installments at checkout, either through classic pay in four style plans or alternative options like Pay in Two, Pay in Five and longer term lending offered with partners. It also provides virtual cards, subscriptions and rewards that extend its service to both integrated and non integrated merchants.

Operations: Sezzle generates all of its reported US$480.9 million in revenue from lending to end customers in the United States, reflecting a focused, credit based payments model in its core market.

Market Cap: US$5.7b

Sezzle sits at the intersection of recovering consumer confidence and the ongoing shift to flexible digital payments, which can matter a lot if stimulus, improved sentiment and a record breaking equity rally translate into heavier spending. The company is already seeing strong earnings momentum, high returns on equity and rising guidance, helped by products like Pay in Five, Sezzle Anywhere and AI driven underwriting that aim to deepen engagement and improve credit decisions. At the same time, investors need to weigh funding risk from reliance on external borrowing, a recent large one off charge and ongoing litigation that could affect profitability. Put together, Sezzle presents a mix of growth, quality metrics and real risks that may warrant closer attention.

Sezzle’s earnings momentum and high returns on equity suggest a story investors may not be fully pricing in yet, so it is worth reading the 2 key rewards and 1 important warning sign

Remitly Global (RELY)

Overview: Remitly Global is a Seattle based fintech company that focuses on digital cross border money transfers, allowing people to send remittances and related financial services through its mobile app and website across the United States, Canada and many other countries.

Operations: Remitly generates US$1.7b in revenue from data processing, with around US$1.1b coming from customers in the United States, US$168.1m from Canada and US$414.7m from the rest of the world.

Market Cap: US$4.7b

Remitly Global offers direct exposure to rising cross border economic activity as migrants and small businesses shift from cash to digital remittances. This trend can be especially powerful when economic recoveries and stimulus support higher transaction volumes. The company has recently turned profitable with strong revenue and earnings growth, a high projected ROE and new products like digital wallets, memberships and stablecoin based services that can deepen customer relationships. At the same time, the stock trades on a premium P/E, relies entirely on higher risk external funding rather than deposits and faces regulatory, competition and fraud risks. For investors who want to understand whether that trade off is worth it, the story behind Remitly’s growth and risk profile runs deeper than the headlines.

Remitly Global’s premium P/E and fresh profitability suggest that the headline story may only be half complete, so it is worth reading the 3 key rewards and 1 important warning sign

DLocal (DLO)

Overview: DLocal is a Montevideo based payments company that helps global merchants accept and send money in emerging markets, handling everything from international and local cards to bank transfers, direct debits, cash and hundreds of alternative payment methods through a single platform.

Operations: DLocal generates US$1.2b in revenue from payment processing, connecting global merchants to consumers across Latin America and other regions.

Market Cap: US$3.7b

DLocal operates in the digital payments space, with a capital light model, current ROE of 34.7% and earnings growth averaging 20% per year, while the stock trades at a discount to some fair value estimates. Revenue growth is forecast ahead of the wider US market and recent index inclusion in the Russell 2000 widens the investor base. However, margins have come under pressure, funding relies on higher risk external sources and the board is relatively inexperienced. The combination of growth, quality metrics and valuation may be of interest to investors who are researching the payments sector.

DLocal’s high 34.7% ROE, capital light model and payments focus in emerging markets hint at a story the market may not be fully joining the dots on yet. For more detail, see the analysis report for DLocal

The three stocks highlighted here are only a starting point, with the full Cyclical Recovery Stocks screener surfacing 30 more companies that pair solid financial health with cyclical recovery narratives investors may find worth investigating. Use Simply Wall St to identify, filter and analyze the specific catalysts, balance sheet strength and earnings profiles that align with your highest conviction ideas so you can concentrate on the opportunities that fit your own approach.

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If Sezzle or any of these companies sound like a great opportunity, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value the ideal entry point. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.