Buy now, pay later lender Klarna has officially filed to hold an initial public offering (IPO) on the New York Stock Exchange under the ticker symbol “KLAR.”
Klarna, headquartered in Sweden, hasn’t yet disclosed the number of shares to be offered or the expected price range. However, the start-up company aims to raise at least $1 billion at a valuation of $15 billion. The decision to go public in the U.S. is seen as a blow to European stock exchanges, which have struggled to retain domestic technology firms.
Klarna CEO Sebastian Siemiatkowski has said in the past that listing shares on a U.S. exchange will provide it with greater visibility and regulatory advantages that it couldn’t achieve if listed in its home market of Europe. Klarna’s IPO is a bullish sign for Wall Street following a historic slow stretch for new offerings.
Valuation and Financials
Klarna’s valuation has taken a hit in recent years. Once valued at $46 billion in a funding round, Klarna saw its valuation decline by 85% in 2022, plummeting to $6.7 billion in its most recent fundraising effort. However, analysts now estimate the company’s valuation to be about $15 billion, bolstered by it achieving profitability.
Klarna reported that its revenue last year increased 24% to $2.8 billion. The company’s operating profit was $181 million, swinging from a loss of -$49 million a year earlier. Founded in 2005, Klarna is best known for its buy now, pay later loans , a service that allows consumers to split purchases into installments. The company competes against the likes of Affirm Holdings (AFRM) and Block (XYZ).
Is AFRM Stock a Buy?
As Klarna isn’t yet publicly traded, we’ll look instead at arguably its biggest competitor, Affirm Holdings. AFRM stock has a consensus Moderate Buy rating among 18 Wall Street analysts. That rating is based on 11 Buy and seven Hold recommendations issued in the past three months. The average AFRM price target of $74.15 implies 48.06% upside from current levels.
Read more analyst ratings on AFRM stock
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