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Klarna Group Plc
(NYSE:KLAR)
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Rating:62Neutral
Price Target:
$21.50
▲(42.76% Upside)
Action:Reiterated
Date:06/27/26
The score reflects a push-pull setup: technical momentum and a constructive earnings call with reiterated 2026 guidance support the stock, but financial performance is constrained by the sharp 2025 cash flow reversal and continued profitability inconsistency. Valuation provides limited support due to a negative P/E and no dividend.
Positive Factors
Revenue growth & high gross margin
Sustained high revenue growth combined with very strong gross margins provides durable top‑line expansion and room to invest in product and market development. Over months, this supports margin recovery and funds scaling without relying solely on external capital.
Negative Factors
Sharp cash flow deterioration
A sudden swing to large negative operating and free cash flows materially increases funding needs and valuation risk. Over 2–6 months this can force higher-cost borrowing, constrain strategic spend, and necessitate asset sales or tighter-originations to restore cash generation.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue growth & high gross margin
Sustained high revenue growth combined with very strong gross margins provides durable top‑line expansion and room to invest in product and market development. Over months, this supports margin recovery and funds scaling without relying solely on external capital.
Read all positive factors
Klarna Group Plc (KLAR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.66B
Dividend YieldN/A
Average Volume (3M)5.00M
Price to Earnings (P/E)―
Beta (1Y)2.01
Revenue Growth33.05%
EPS Growth-199.10%
CountryUS
Employees2,831
SectorGeneral
Sector StrengthN/A
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)-0.53
Shares Outstanding377,507,900
10 Day Avg. Volume4,531,792
30 Day Avg. Volume5,001,103
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)4.29
Price to Sales (P/S)3.07
P/FCF Ratio-10.40
Enterprise Value/Market Cap0.46
Enterprise Value/Revenue1.40
Enterprise Value/Gross Profit2.29
Enterprise Value/Ebitda16.62
Forecast
1Y Price Target
$21.93Price Target Upside45.61% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)0.19
Revenue Forecast (FY)$4.41B
Klarna Group Plc Business Overview & Revenue Model
Company Description
Klarna Group plc operates as a technology-driven payments provider, extending its services across the United Kingdom, United States, Germany, Sweden, and globally. The company offers a wide array of solutions, including advertising and marketing, ...
How the Company Makes Money
Klarna primarily makes money through fees it charges merchants for facilitating transactions and offering flexible payment options at checkout. Merchant revenue typically includes a per-transaction fee and/or a percentage of the purchase amount in...
Klarna Group Plc Earnings Call Summary
Earnings Call Date:May 14, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 18, 2026
Earnings Call Sentiment Positive
The call painted a picture of strong top-line and operating momentum: double-digit growth in revenue, GMV and transaction margin dollars, milestone user and merchant expansion, clear operating leverage, and restored profitability metrics with guidance reiterated. Offsetting risks include higher transaction and processing costs from rapid product scaling, provisioning and cohort variability requiring model tuning, potential volatility from receivable sales and FX normalization, and seasonality/tougher comps in the back half. On balance, the positives (broad growth, margin expansion, profitable compounding network, strong card and deposit economics) materially outweigh the near-term execution and volatility risks.Positive Updates
Strong Revenue and Profitability Improvement
Revenue of $1.012 billion, up 44% year-over-year; adjusted operating profit of $68 million versus $3 million a year ago; operating income turned positive to $17 million from a $90 million loss a year ago; net income approximately $1 million, a ~$100 million year-over-year improvement; EPS improved from -$0.26 to -$0.01.
Negative Updates
Rising Transaction and Processing Costs
Transaction costs increased to $623 million, up 45% year-over-year (37% like-for-like); processing and servicing costs grew 62% year-over-year, driven by scaling of Fair Financing and the card, pressuring near-term unit economics.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Revenue and Profitability Improvement
Revenue of $1.012 billion, up 44% year-over-year; adjusted operating profit of $68 million versus $3 million a year ago; operating income turned positive to $17 million from a $90 million loss a year ago; net income approximately $1 million, a ~$100 million year-over-year improvement; EPS improved from -$0.26 to -$0.01.
Read all positive updates
Company Guidance
Klarna reiterated unchanged 2026 guidance: full‑year GMV of greater than $155 billion, revenue greater than 2.8% of GMV (implying >$4.34 billion), Transaction Margin Dollars (TMD) greater than 1.04% of GMV (implying >$1.61 billion) and adjusted operating income greater than 6.9% of revenue (implying >$299 million on the minimum revenue). For Q2 the company guided GMV of $35.5–$36.5 billion, revenue of $960 million–$1.0 billion, TMD of $375–$395 million and adjusted operating income of $30–$50 million, noting normal retail seasonality (Q1 ≈20% of annual GMV; Q2 ≈23%) and FX normalization versus last year.Klarna Group Plc Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
66
Positive
Cash Flow
45
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.82B | 3.51B | 2.67B | 2.20B | 1.89B | 1.62B |
| Gross Profit | 2.33B | 1.91B | 2.07B | 1.66B | 1.37B | 1.02B |
| EBITDA | 322.00M | 551.00M | 427.00M | 126.00M | -687.00M | -602.26M |
| Net Income | -199.00M | -294.00M | 3.00M | -249.00M | -1.04B | -775.71M |
Balance Sheet | ||||||
| Total Assets | 17.99B | 18.80B | 13.80B | 13.75B | 12.01B | 11.81B |
| Cash, Cash Equivalents and Short-Term Investments | 4.00B | 3.80B | 3.59B | 2.39B | 2.57B | 2.83B |
| Total Debt | 1.36B | 1.43B | 791.00M | 472.00M | 637.95M | 1.28B |
| Total Liabilities | 15.35B | 16.11B | 11.55B | 11.55B | 9.69B | 9.10B |
| Stockholders Equity | 2.46B | 2.51B | 2.09B | 2.19B | 2.32B | 2.70B |
Cash Flow | ||||||
| Free Cash Flow | -2.62B | -1.03B | 542.00M | 723.00M | 231.00M | -392.56M |
| Operating Cash Flow | -2.59B | -1.03B | 587.00M | 808.00M | 336.00M | -365.47M |
| Investing Cash Flow | -31.00M | -30.00M | 154.00M | -83.00M | -459.00M | -489.40M |
| Financing Cash Flow | 1.00B | 988.00M | 312.00M | -62.00M | 18.00M | 2.14B |
Klarna Group Plc Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $2.40B | 35.29 | 10.01% | ― | 7.19% | -36.03% | |
75 Outperform | $17.01B | 42.80 | 20.74% | ― | 23.44% | 151.36% | |
72 Outperform | $27.94B | 71.24 | 11.17% | ― | 32.33% | ― | |
69 Neutral | $1.68B | 733.48 | 0.27% | ― | 23.39% | -94.59% | |
62 Neutral | $11.66B | -36.14 | -8.16% | ― | 33.05% | -199.10% | |
60 Neutral | $4.03B | 54.89 | 6.42% | ― | 28.28% | -72.43% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
KLAR
Klarna Group Plc
19.63
-23.11
-54.07%
FOUR
Shift4 Payments
50.01
-52.25
-51.10%
PAYO
Payoneer
7.10
0.44
6.61%
AFRM
Affirm Holdings
84.45
18.30
27.66%
MQ
Marqeta
16.13
-7.19
-30.83%
TOST
Toast Inc
30.00
-14.34
-32.34%
Klarna Group Plc Corporate Events
Klarna Group Wins Overwhelming Shareholder Backing at 2026 AGM
Jun 23, 2026
On 22 June 2026, Klarna Group plc held its 2026 Annual General Meeting, with holders representing about 72.3% of total voting rights participating. Shareholders passed all 12 resolutions with at least 99% of votes cast, including approvals of the ...
Klarna Group Sets First Post-IPO NYSE AGM and Seeks Shareholder Backing for Pay Policy and Capital Authorities
May 27, 2026
On May 27, 2026, Klarna Group plc released its 2025 Annual Report, Directors’ Remuneration Report and policy, and formally convened its first Annual General Meeting since listing on the New York Stock Exchange. The AGM is scheduled for June ...
Klarna Posts Profitable Q1 2026 as Revenue Jumps 44% and Network Passes One Million Merchants
May 14, 2026
On May 14, 2026, Klarna reported strong first-quarter 2026 results, with gross merchandise volume rising 33% year-on-year to $33.7 billion and revenue climbing 44% to $1.0 billion. Adjusted operating profit surged to $68 million from $3 million a ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.