Klarna Group Plc (KLAR) AI Stock Analysis

• Market Cap: N/A
• Dividend Yield: N/A
• Average Volume (3M): 2.42M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.67
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 3,778
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): N/A
• Shares Outstanding: 377,255,040
• 10 Day Avg. Volume: 3,589,976
• 30 Day Avg. Volume: 2,423,424
• PEG Ratio: -55.06
• Price to Book (P/B): 8.00
• Price to Sales (P/S): 6.25
• P/FCF Ratio: 30.77
• Enterprise Value/Market Cap: 10.00T>
• Enterprise Value/Revenue: 4.07
• Enterprise Value/Gross Profit: 5.96
• Enterprise Value/Ebitda: 89.88
• 1Y Price Target: $47.53
• Price Target Upside: 51.03% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): -0.49
• Revenue Forecast (FY): $3.50B

• Rating: 65 Neutral
• Price Target: $33.00 ▲(4.86% Upside)

Klarna's overall stock score is driven by strong financial performance and positive earnings call sentiment, highlighting robust revenue growth and operational efficiency. However, technical analysis indicates bearish trends, and the absence of valuation metrics adds uncertainty. Profitability challenges and high U.S. payment fees are notable risks.

Positive Factors

Revenue Growth

Strong revenue growth, particularly in the U.S., indicates robust market demand and effective business expansion strategies, supporting long-term growth prospects.

Operational Efficiency

Improved operational efficiency through AI and cost management enhances profitability potential and competitive positioning over time.

Global Merchant Expansion

Expanding merchant base strengthens Klarna's market presence and network effects, driving future transaction volumes and revenue.

Negative Factors

Profitability Challenges

Ongoing profitability issues, despite revenue growth, may hinder sustainable financial performance and investor confidence.

High Payment Fees in the U.S.

High payment fees in the U.S. could pressure margins and profitability, impacting competitive advantage in a key market.

Rising Costs

Increased costs and credit losses challenge profitability, potentially affecting long-term financial health and strategic flexibility.

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, and personal shopping and money assistance services. In addition, it provides digital retail banking solutions, such as fixed-term deposits, savings, and bank accounts; digital loyalty cards; and customer and merchant support services, as well as manages personal finances. Klarna Group plc was formerly known as Klarna UK II plc and changed its name to Klarna Group plc in December 2023. The company was founded in 2005 and is based in London, United Kingdom.

How the Company Makes Money

Klarna generates revenue primarily through merchant fees and interest income. The company charges merchants a fee for each transaction processed through its platform, which is a percentage of the sale amount, incentivizing retailers to adopt Klarna's payment solutions to boost their sales conversions. Additionally, Klarna earns interest on the financing it provides to consumers who choose to pay in installments or defer payments. This interest income is a significant revenue source, particularly when consumers opt for longer repayment terms. The company also engages in strategic partnerships with various retailers and financial institutions, enhancing its reach and driving more transactions through its platform, thus further contributing to its earnings.

Klarna Group Plc Financial Statement Overview

Summary

Klarna Group Plc exhibits strong revenue growth and cash flow generation, which are positive indicators for future performance. However, profitability remains a concern with low net profit margins and negative EBIT margins. The balance sheet is stable with moderate leverage, but the return on equity is low, suggesting room for improvement in generating returns for shareholders.

Income Statement

Klarna Group Plc showed a strong revenue growth rate of 16.58% from the previous year, indicating positive momentum. The gross profit margin improved slightly to 77.65%, showcasing efficient cost management. However, the net profit margin remains low at 0.11%, and the EBIT margin is negative, reflecting ongoing profitability challenges. The EBITDA margin improved significantly, suggesting better operational efficiency.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.38, indicating a balanced approach to leveraging. The return on equity is low at 0.14%, suggesting limited profitability relative to shareholder equity. The equity ratio stands at 15.11%, reflecting a stable capital structure with a strong equity base.

Cash Flow

Klarna's free cash flow grew by 112.99%, highlighting strong cash generation capabilities. The operating cash flow to net income ratio is robust, indicating efficient cash conversion from operations. The free cash flow to net income ratio is high at 92.33%, demonstrating effective cash management despite low net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.36B	2.67B	2.20B	1.89B	1.62B	1.33B
Gross Profit	1.61B	2.07B	1.66B	1.37B	1.02B	955.93M
EBITDA	107.00M	427.00M	126.00M	-687.00M	-602.26M	-116.19M
Net Income	-248.00M	3.00M	-249.00M	-1.04B	-775.71M	-153.95M
Balance Sheet
Total Assets	20.78B	13.80B	13.75B	12.01B	11.81B	7.51B
Cash, Cash Equivalents and Short-Term Investments	6.79B	3.59B	2.39B	2.57B	2.83B	1.24B
Total Debt	2.62B	791.00M	472.00M	637.95M	1.28B	967.55M
Total Liabilities	18.16B	11.55B	11.55B	9.69B	9.10B	5.77B
Stockholders Equity	2.45B	2.09B	2.19B	2.32B	2.70B	1.73B
Cash Flow
Free Cash Flow	1.99B	542.00M	723.00M	231.00M	-392.56M	190.47M
Operating Cash Flow	2.01B	587.00M	808.00M	336.00M	-365.47M	198.24M
Investing Cash Flow	-22.00M	154.00M	-83.00M	-459.00M	-489.40M	-57.29M
Financing Cash Flow	963.00M	312.00M	-62.00M	18.00M	2.14B	535.19M

Klarna Group Plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FOUR	74 Outperform	$6.22B	32.94	15.52%	―	23.16%	27.38%
TOST	69 Neutral	$20.10B	78.42	15.96%	―	25.76%	―
PAYO	69 Neutral	$2.05B	30.26	9.79%	―	10.58%	-45.52%
AFRM	65 Neutral	$22.71B	101.96	7.60%	―	37.00%	―
KLAR	65 Neutral	―	―	―	―	―	―
MQ	64 Neutral	$2.08B	―	-4.10%	―	20.11%	-391.61%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Klarna Group Plc Corporate Events

Klarna Reports Strong Q3 2025 Financial Results with Significant Revenue and GMV Growth

On November 18, 2025, Klarna Group Plc reported its third-quarter 2025 financial results, highlighting significant growth in revenue and gross merchandise volume (GMV). The company achieved a revenue of $903 million, marking a 26% increase year-over-year, and GMV of $32.7 billion, up 23% like-for-like. Klarna’s Fair Financing offering saw remarkable growth, particularly in the U.S., contributing to a strong transaction margin. The Klarna Card also experienced rapid adoption since its July launch, indicating consumer demand for flexible payment solutions. Despite an adjusted operating loss of $14 million, Klarna’s operational efficiency improved, with realized losses decreasing and credit quality remaining strong. The company anticipates continued growth and profitability, driven by its AI-enhanced operations and expanding global network.

Klarna Reports Q3 2025 Financial Losses Amid Rising Costs

On November 18, 2025, Klarna Group Plc released its unaudited interim condensed consolidated financial statements for the three and nine-month periods ending September 30, 2025. The report highlights a net loss of $95 million for the third quarter and $246 million for the nine-month period, compared to a net profit in the same periods of the previous year. Despite increased revenue from transactions and services, the company faced higher operating expenses and credit losses, impacting its profitability. The financial results indicate challenges in maintaining profitability amidst growing costs, which could affect the company’s market positioning and stakeholder confidence.