Klarna Group Plc (KLAR)
NYSE:KLAR
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Klarna Group Plc
(NYSE:KLAR)
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Rating:51Neutral
Price Target:
$13.00
▼(-13.68% Downside)
Action:ReiteratedDate:02/25/26
The score is held back primarily by weakened 2025 profitability and a major reversal into heavy cash burn with rising debt, alongside a very bearish technical setup. Earnings-call guidance and operating-leverage/capital-efficiency initiatives provide some offset, but valuation is constrained by ongoing losses.
Positive Factors
Strong revenue and GMV growth
Klarna’s accelerating top-line and large GMV create durable scale: higher transaction flow supports merchant monetization, spreads fixed costs across volume, and underpins sustained margin improvement potential as checkout share and product mix evolve over the next months.
Negative Factors
Sharp cash burn in 2025
A sudden swing to large negative operating and free cash flow materially reduces financial flexibility. Sustained cash burn increases dependence on external financing or asset sales, constraining reinvestment and risking disruption to growth plans if profitability doesn't improve within months.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong revenue and GMV growth
Klarna’s accelerating top-line and large GMV create durable scale: higher transaction flow supports merchant monetization, spreads fixed costs across volume, and underpins sustained margin improvement potential as checkout share and product mix evolve over the next months.
Read all positive factors
Klarna Group Plc (KLAR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.08B
Dividend YieldN/A
Average Volume (3M)6.22M
Price to Earnings (P/E)―
Beta (1Y)2.10
Revenue Growth24.74%
EPS Growth-10045.57%
CountryUS
Employees3,778
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)-0.78
Shares Outstanding377,507,900
10 Day Avg. Volume5,630,781
30 Day Avg. Volume6,217,367
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 Cap0.31
Enterprise Value/Revenue0.90
Enterprise Value/Gross Profit1.53
Enterprise Value/Ebitda26.16
Forecast
1Y Price Target
$22.55Price Target Upside49.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
EPS Forecast (FY)0.03
Revenue Forecast (FY)$4.42B
Klarna Group Plc Business Overview & Revenue Model
Company Description
Klarna Group plc operates as a technology-driven payments company in the United Kingdom, the United States, Germany, Sweden, and internationally. The company offers advertising and marketing solutions, consumer services, digital financial services...
How the Company Makes Money
Klarna primarily makes money by monetizing merchant payments and consumer credit products tied to retail transactions. A core revenue stream is merchant-funded fees: when a shopper uses Klarna at checkout, Klarna typically earns revenue from the m...
Klarna Group Plc Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 14, 2026
Earnings Call Sentiment Positive
The call portrayed robust topline and customer-growth momentum — substantial YoY increases in active consumers (+28%), merchants (+42%), revenue (+38% to >$1B), and banking adoption (banking customers +101%, card users +288%). Management explained that rapid Fair Financing and lending growth create an accounting timing effect (upfront provisioning) that depressed near-term transaction margin dollars despite strong lifetime economics and planned mitigants (loan sales/forward flows, scaling of deposits and internal rails). While funding/processing costs in the U.S., a quarterly TMD miss, and lingering investor concerns about near-term profitability introduce measurable near-term risks and modeling uncertainty, the fundamentals (network growth, higher ARPU among banking customers, operating leverage, and tools to accelerate profitability) are compelling. Overall the positives around scale, product adoption, and long-term economics outweigh the short-term provisioning and cost headwinds.Positive Updates
Strong Consumer and Merchant Growth
Active consumers reached 118 million, up 28% year-over-year; merchant count grew to 966,000 (added 285,000 merchants), up 42% year-over-year, demonstrating continued network expansion across 26 markets.
Negative Updates
Quarterly Transaction Margin Miss and Upfront Provisioning Drag
Management acknowledged Q4 transaction margin dollars did not meet guidance. Rapid lending growth (Fair Financing) resulted in upfront provisioning that depresses near-term transaction margin dollars (example: $2.5B originations produced a $40 million headwind in the quarter).
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Consumer and Merchant Growth
Active consumers reached 118 million, up 28% year-over-year; merchant count grew to 966,000 (added 285,000 merchants), up 42% year-over-year, demonstrating continued network expansion across 26 markets.
Read all positive updates
Company Guidance
Klarna said its 2026 guidance assumes continued compounding revenue growth and that revenue will outpace operating costs, with adjusted operating income margin expected to exceed about 6.9% and transaction‑margin dollars (TMD) accelerating into H2 as Fair‑Financing cohorts mature; Q1 TMD is expected to be broadly consistent with Q4‑25 (Q4 TMD after provisions $372M, before provisions $622M). Management plans to keep executing forward‑flow loan sales to improve capital efficiency (first forward flow recognized $73M gain in Q4 and roughly $1.6B of loans were sold in Q4) while growing banking products, and it guided 2026 GMV and revenue growth roughly in line with 2025 (2025 total GMV ≈ $127B; Q4 GMV $38.7B; revenue grew 38% to >$1B in Q4). The outlook incorporates stable credit trends (provisions fell from 0.72% to 0.65% of GMV Q3→Q4), the Q4 Fair‑Financing footprint (≈$2.5B U.S. originations in Q4 with $80M provisions and $40M revenue recognized), and the expectation that mix and forward flows will drive improving TMD and adjusted operating income through the year.Klarna Group Plc Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
66
Positive
Cash Flow
45
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.51B | 2.67B | 2.20B | 1.89B | 1.62B |
| Gross Profit | 1.98B | 2.07B | 1.66B | 1.37B | 1.02B |
| EBITDA | -104.00M | 427.00M | 126.00M | -687.00M | -602.26M |
| Net Income | -294.00M | 3.00M | -249.00M | -1.04B | -775.71M |
Balance Sheet | |||||
| Total Assets | 18.80B | 13.80B | 13.75B | 12.01B | 11.81B |
| Cash, Cash Equivalents and Short-Term Investments | 3.80B | 3.59B | 2.39B | 2.57B | 2.83B |
| Total Debt | 1.36B | 791.00M | 472.00M | 637.95M | 1.28B |
| Total Liabilities | 16.11B | 11.55B | 11.55B | 9.69B | 9.10B |
| Stockholders Equity | 2.51B | 2.09B | 2.19B | 2.32B | 2.70B |
Cash Flow | |||||
| Free Cash Flow | -1.03B | 542.00M | 723.00M | 231.00M | -392.56M |
| Operating Cash Flow | -1.03B | 587.00M | 808.00M | 336.00M | -365.47M |
| Investing Cash Flow | -30.00M | 154.00M | -83.00M | -459.00M | -489.40M |
| Financing Cash Flow | 988.00M | 312.00M | -62.00M | 18.00M | 2.14B |
Klarna Group Plc Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $16.67B | 51.68 | 17.93% | ― | 24.05% | 1798.38% | |
71 Outperform | $1.68B | 26.33 | 9.84% | ― | 7.68% | -40.56% | |
70 Outperform | $1.76B | 55.80 | 0.27% | ― | 23.39% | -94.62% | |
63 Neutral | $3.40B | 42.45 | 7.54% | ― | 25.51% | -65.33% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $21.85B | 48.00 | 8.83% | ― | 32.77% | ― | |
51 Neutral | $10.08B | -60.48 | -12.47% | ― | 24.74% | -10045.57% |
* Technology Sector Average
KLAR
Klarna Group Plc
14.29
-28.45
-66.57%
FOUR
Shift4 Payments
42.88
-42.55
-49.81%
PAYO
Payoneer
4.86
-1.47
-23.22%
AFRM
Affirm Holdings
65.58
11.32
20.86%
MQ
Marqeta
4.14
-0.36
-7.91%
TOST
Toast Inc
28.31
-8.34
-22.76%
Klarna Group Plc Corporate Events
Klarna Group Files 2025 Earnings Presentation with U.S. Regulators
Feb 20, 2026
On February 19, 2026, Klarna Group plc released its earnings presentation for the year ended December 31, 2025, and furnished it to the U.S. Securities and Exchange Commission via a Form 6-K filed on February 20. The filing formalizes the disclosu...
Klarna Posts First Billion-Dollar Quarter as Fair Financing and Card Push Banking Pivot in Q4 2025
Feb 19, 2026
On February 19, 2026, Klarna reported its fourth-quarter and full-year 2025 results, highlighting the shift from pure payments to a broader digital banking model. In Q4 2025 the group delivered its first billion-dollar revenue quarter at $1.082 bi...
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.