Klarna Q2 Earnings on August 18: Options Market Expects a 20% Stock Move

Klarna Group (KLAR), a payments and consumer credit company, is set to report its fiscal second-quarter results on August 18, and options traders are pricing in a potentially sharp move following the report. Based on TipRanks’ Options Traders Tool, the market expects KLAR stock to move about 20.21% ($4.18), in either direction after earnings.

This implied move is significantly above the stock’s average absolute post-earnings move of 11.68% over the past three quarters, suggesting options traders expect a much larger move than the stock’s recent historical earnings volatility.

The Implied Move Breakdown

To estimate the expected earnings swing, the calculation uses options expiring on August 21, the first expiration after the report. At the $20.50 strike, which is close to the stock’s current price, the call costs $1.79 and the put costs $2.39. The calculation is as follows:

$1.79 call + $2.39 put = $4.18 straddle

$4.18 ÷ $20.68 = 20.21% implied move

The $4.18 move implies an expected trading range of approximately $16.50 to $24.86 based on the current share price of $20.68. An at-the-money straddle estimates the magnitude of the move, not its direction.

What to Watch in Klarna’s Results

Klarna’s Q2 report will provide investors with an update on whether the company can maintain the strong growth seen earlier this year. Wall Street expects Klarna to report a loss of $0.04 per share, narrower than the prior-year period’s loss of $0.14 per share. Revenue is expected to rise 21% year-over-year to $996.15 million.

In Q1, Klarna reported $1.01 billion in revenue, up 44% year-over-year, while gross merchandise volume (GMV) increased 33% to $33.7 billion. Adjusted operating profit reached $68 million, compared with $3 million a year earlier.

Investors will therefore watch revenue growth, GMV, profitability, and consumer activity for signs that Klarna’s momentum is continuing.

With options pricing in a move of more than 20%, the company’s guidance and commentary could be just as important as the headline numbers. A strong report and upbeat outlook could push shares sharply higher, while any signs of slowing growth or weaker profitability could trigger a significant decline. Investors will also watch for updates on consumer activity and Klarna’s expansion in the U.S. market.

Is Klarna a Good Buy?

Wall Street analysts are moderately bullish on Klarna’s long-term prospects. On TipRanks, KLAR has a Moderate Buy consensus rating based on eight Buys and seven Hold ratings. The average Klarna price target of $22.07 implies 6.7% upside potential from current levels.