Key Takeaways
- Shares of Klarna tumbled 6.1% to $19.53 during Monday’s trading session, accompanied by volume that was 84% lighter than typical.
- The company reports second-quarter financial results Tuesday morning; consensus calls for a $0.05 per share loss and $992.8 million in revenue.
- Wall Street maintains a “Moderate Buy” rating with an average price target of $24.55, suggesting approximately 18% potential upside.
- The Swedish fintech submitted applications for a U.S. banking charter in early July, though some analysts question the earnings impact given its existing European license.
- During Q1, Klarna surprised positively with a $0.01 loss compared to the anticipated $0.20 loss, while generating $1 billion in revenue.
Shares of Klarna (KLAR) experienced a sharp 6.1% decline to $19.53 during Monday’s session, just one day before the company unveils its second-quarter financial performance. The stock had finished Friday’s trading at $20.79. Volume registered approximately 887,765 shares, representing an 84% decrease from the company’s 5.3 million share daily average.
The decline occurred as market participants positioned themselves ahead of Tuesday’s before-the-bell earnings announcement, with considerable attention focused on whether the buy-now-pay-later provider can continue reducing its quarterly losses.
Analyst consensus points toward an adjusted loss of $0.05 per share alongside revenue of $992.8 million for the quarter ending in June. These figures would represent a 61.5% year-over-year improvement in the company’s loss metrics and 20.6% revenue expansion. However, they would also signify a sequential decline from the first quarter, when Klarna delivered $1 billion in revenue while posting just a $0.01 per share loss.
Per-share earnings estimates have climbed 11.29% during the past two months, suggesting analysts are becoming increasingly optimistic about Klarna’s journey toward sustained profitability.
U.S. Banking Charter Application Under Scrutiny
Among the most significant developments surrounding the earnings report is Klarna’s pursuit of a United States banking charter. The company submitted formal applications with both the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation during early July to create Klarna Bank USA.
This initiative aligns with a broader industry trend of BNPL and digital lending companies pursuing banking licenses throughout 2026. However, some market observers remain skeptical about the transformative impact for Klarna specifically.
Kyle Peterson, an analyst at Needham who maintains a neutral stance on the shares, highlighted that Klarna has operated with a European banking license since 2017. This existing authorization diminishes the potential funding cost benefits the company might otherwise capture. Peterson indicated that Klarna should “ultimately receive less EPS accretion relative to peers that do not currently have access to deposit funding for loans.”
Wall Street Sentiment and Target Prices
The analyst community maintains a generally favorable outlook on the shares. Overall consensus stands at “Moderate Buy” with a mean price objective of $24.55, pointing to roughly 18% upside potential from Monday’s closing price. An alternative dataset places the average target at $32.28.
Recent analyst movements include JPMorgan boosting its price target from $20 to $22 while maintaining an overweight stance, whereas TD Cowen elevated its target from $17 to $19 with a hold recommendation. Barclays launched coverage with an equal weight rating and $20 price objective. Zacks revised the stock from strong buy to hold on August 5.
The breakdown shows one analyst with a strong buy rating, eleven with buy recommendations, ten holding neutral positions, and one advocating a sell.
Institutional activity has remained robust. Commonwealth Bank of Australia established a fresh position valued at approximately $503 million. Wellington Management initiated a stake worth roughly $349 million. BlackRock expanded its holdings by 89.6% throughout the second quarter.
Klarna’s shares have fluctuated between $12.06 and $57.20 during the trailing twelve months. The stock currently trades closer to the bottom of this range, carrying a market capitalization near $7.29 billion and a price-to-earnings multiple of -37.26.
The stock’s 50-day moving average stands at $18.90, while the 200-day moving average registers at $16.85.
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