Klarna stock has received its first ratings from analysts since its IPO. What do they advise?

On Tuesday, two analysts started tracking the shares of one of the most expensive European fintech startups - installment service Klarna. And the experts' opinions on what to do with the securities of the company, which last week held an IPO in New York, diverged. Compass Point analyst advised investors to buy shares and predicted their growth by almost 17%, while Needham was more restrained and recommended to keep already bought securities in the portfolio.

Compass Point initiated coverage on shares of Klarna with a Buy recommendation and $53 target price, Investing.com reports. The investment firm's target implies a 16.5% increase in the company's market value from its September 15 closing level. Compass Point rated Klarna stock's risk-to-return ratio at a favorable 2-to-1 in the base case scenario.

Analysts noted that demand for Buy Now, Pay Later services remains robust and the credit situation in the payments sector looks "fairly favorable." "BNPL (Buy Now, Pay Later) services and other payment companies have one of the largest untapped markets among payment mechanisms. We do not believe they will completely replace credit cards, but they have their place in the ecosystem," said analysts Dominic Gabriel and Giuliano Bologna in a note cited by Seeking Alpha.

Compass believes Klarna stock will outperform rivals in the payments sector as the company expands its U.S. presence. The service benefits from the scale of its business: the more customers it has, the cheaper its core costs are. Klarna also has access to cheap funding through deposits, which allows it to remain profitable. As a result, it can offer customers installments at lower rates and sellers favorable terms of cooperation, gradually taking share away from competitors.

As the business grows in the US, Klarna will have room for cross-selling (additional products beyond the core product), the analysts also added. They projected the company's operating margin to be in the range of 10-11% by 2027, with the potential to grow above 20% after 2027.

Analyst Needham also initiated coverage of Klarna stock on Tuesday, but more restrained - with a Hold recommendation and no target price, Investing.com and GuruFocus reported. Needham recognized the fintech company's leadership in the BNPL segment: it has $114 billion in gross merchandise turnover, a large network of partnerships with leading brands, over $3 billion in annual revenue and a 72% gross margin. The investment firm cited its banking license, which gives Klarna an advantage in raising funding, as a separate plus.

Nevertheless, the analyst expressed concerns that Klarna's costs could rise: the company seems to be moving away from its previous course of freezing/reducing staff and replacing its support team with artificial intelligence. Needham also questioned Klarna becoming a partner of the largest retailer in the U.S. Walmart instead of another "buy now-pay later" service Affirm, a deal that could prove "economically negative" for Klarna, according to the analyst.

On September 16 shares of Klarna jumped by 4.3% up to $47.48. Then, however, they partially lost their growth rates and continued trading in plus by about 1.4%.

Klarna's IPO on the New York Stock Exchange (NYSE) took place on September 10, 2025. Klarna and its shareholders raised $1.37 billion on the NYSE by offering 34.3 million shares at $40 per paper, while the upper end of the stated price range was $35-37. As a result, the market value of the company amounted to $15.1 bln.

On the day of the debut, Klarna's shares jumped by 43% from the initial offering price, and ended trading up almost 15%. Nevertheless, the company's market value is now up only 1% compared to the date of going public.

This article was AI-translated and verified by a human editor