KLAR Stock Forecast & Price Target

Klarna Group PLC has demonstrated significant improvements in its financial performance, particularly through reduced net charge-offs, which can be attributed to the enhanced maturity of its underwriting models and expansion into new markets like the United States and the United Kingdom. Furthermore, the company's merchant base has expanded by over 201,000, reflecting a 34% year-over-year increase in the second quarter, which strengthens its position in the buy now, pay later sector by integrating new retailers into its payment solutions. Additionally, the BNPL payment value in the U.S. is projected to reach $116.7 billion in 2023, showing a robust 19.2% year-over-year growth, with an expected compound annual growth rate of 12% leading up to 2028, indicating a strong market opportunity for Klarna.

Klarna Group PLC has reported realized losses of 0.45% as a percentage of gross merchandise volume (GMV) in 2Q25, reflecting a slight year-over-year decline. Additionally, there has been a concerning trend of declining GMV per merchant, attributed to the company's recent focus on partnerships with payment service providers that cater to smaller retailers, thereby impacting larger brand transactions. This combination of persistent losses and declining metrics raises concerns about the company's long-term financial viability in the increasingly competitive buy now, pay later market.