Key Takeaways
- Shares of Klarna declined 6.1% to $19.53 Monday, accompanied by trading volume 84% lighter than typical levels.
- The company reports Q2 results Tuesday morning; consensus calls for a $0.05 per share loss with revenue reaching $992.8 million.
- The Street maintains a “Moderate Buy” stance with an average target of $24.55, suggesting roughly 18% potential gain.
- The fintech company submitted applications for U.S. banking charter approval in early July, though some analysts question the margin impact given its existing European license.
- In Q1, Klarna exceeded forecasts with a $0.01 loss compared to the anticipated $0.20 loss, while generating $1 billion in revenue.
Shares of Klarna (KLAR) retreated 6.1% to $19.53 during Monday’s session, one day before the company releases its second-quarter financial results. The stock had settled at $20.79 in the previous trading day. Volume registered approximately 887,765 shares, representing a decline of roughly 84% compared to the typical daily average of 5.3 million.
The decline occurred as market participants prepared for Tuesday’s pre-opening bell announcement, with attention focused on whether the buy-now-pay-later platform can continue improving its bottom line.
Consensus estimates point to an adjusted loss of $0.05 per share alongside revenue of $992.8 million for the quarter ending in June. Those figures would represent a 61.5% year-over-year reduction in losses coupled with 20.6% top-line expansion. However, they would also reflect deterioration from the first quarter, when Klarna delivered $1 billion in revenue with only a $0.01 per share loss.
Earnings per share projections have climbed 11.29% during the past two months, indicating analysts are becoming increasingly optimistic about Klarna’s trajectory toward positive earnings.
U.S. Banking Charter Application Takes Center Stage
Among the key narratives surrounding earnings is Klarna’s pursuit of a U.S. banking charter. The company submitted regulatory filings with the Utah Department of Financial Institutions along with the FDIC in 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 transformational impact for Klarna.
Kyle Peterson, an analyst at Needham who maintains a hold recommendation, observed that Klarna has operated with a European banking license since 2017. This existing credential diminishes the funding cost benefits the company might otherwise capture. Peterson indicated that Klarna will “ultimately receive less EPS accretion relative to peers that do not currently have access to deposit funding for loans.”
Wall Street Ratings and Target Outlook
The analyst community leans positive on the shares. The overall rating stands at “Moderate Buy” with a mean price objective of $24.55, suggesting approximately 18% appreciation from Monday’s closing level. Alternative data sources indicate an average target of $32.28.
Latest analyst moves include JPMorgan increasing its price target from $20 to $22 while maintaining an overweight stance, and TD Cowen boosting its objective from $17 to $19 with a hold rating. Barclays launched coverage with an equal weight rating alongside a $20 target. Zacks Research revised its recommendation from strong buy to hold on August 5.
The breakdown shows one analyst with a strong buy rating, eleven carrying buy recommendations, ten at hold, and one with a sell rating.
Institutional activity has been 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 ownership by 89.6% throughout Q2.
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 that spectrum, with a market capitalization around $7.29 billion and a price-to-earnings ratio of -37.26.
The 50-day moving average stands at $18.90 while the 200-day moving average rests at $16.85.
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