In a report released today, Elizabeth Porter from Morgan Stanley upgraded Klaviyo, Inc. Class A to a Buy, with a price target of $50.00.
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Elizabeth Porter’s rating is based on Klaviyo’s strategic expansion from a focus on email marketing to a comprehensive CRM platform for B2C businesses. This transition positions Klaviyo to tap into a broader market opportunity, enabling sustained revenue growth of over 20% annually over the next three years. The company’s strong track record of technological innovation supports this growth trajectory, making it a standout in a software sector that often lacks high-growth opportunities.
Porter also highlights that Klaviyo’s current valuation, with an enterprise value to sales ratio of approximately 6x for its high-quality growth, is undervalued. The company’s ability to expand its product offerings is expected to enhance average revenue per user and ensure durable revenue growth. Additionally, Klaviyo’s improving margins and operational leverage, following significant investments, are anticipated to drive free cash flow estimates above market expectations in the coming years. These factors collectively underpin Porter’s decision to upgrade Klaviyo to an Overweight rating.
Porter covers the Technology sector, focusing on stocks such as Autodesk, HubSpot, and Amplitude. According to TipRanks, Porter has an average return of -3.0% and a 51.09% success rate on recommended stocks.