Klarna (KLAR) stock dropped 6.1% to $19.53 on Monday, the day before its second-quarter earnings report. The stock had closed the prior session at $20.79. Trading volume came in at roughly 887,765, about 84% below the average daily volume of 5.3 million.
The move came ahead of Tuesday’s pre-market earnings release, with investors watching closely to see if the buy-now-pay-later firm can keep narrowing its losses.
Wall Street is projecting an adjusted loss of $0.05 per share on revenue of $992.8 million for the June quarter. That would mark a 61.5% year-over-year improvement in losses and 20.6% revenue growth. But it would also be a step back from Q1, when Klarna posted revenue of $1 billion and a loss of just $0.01 per share.
EPS estimates have risen 11.29% over the past 60 days, a sign analysts are gradually warming to Klarna’s path toward profitability.
One of the bigger storylines heading into earnings is Klarna’s push for a U.S. banking charter. The company filed applications with the Utah Department of Financial Institutions and the FDIC in early July to establish Klarna Bank USA.
The move is part of a broader wave of BNPL and digital lending firms seeking banking licenses in 2026. But not everyone is convinced it’s a game changer for Klarna specifically.
Needham analyst Kyle Peterson, who carries a hold rating on the stock, noted that Klarna has held a banking license in Europe since 2017. That limits the funding cost advantages it might otherwise gain. Peterson wrote that Klarna will “ultimately receive less EPS accretion relative to peers that do not currently have access to deposit funding for loans.”
Analysts are broadly positive on the stock. The consensus sits at “Moderate Buy” with a mean price target of $24.55, implying around 18% upside from Monday’s close. A separate data set puts the average target at $32.28.
Recent analyst activity includes JPMorgan raising its target from $20 to $22 with an overweight rating, while TD Cowen lifted its target from $17 to $19 with a hold. Barclays initiated with an equal weight rating and a $20 target. Zacks downgraded the stock from strong buy to hold on August 5.
One analyst has a strong buy, eleven have buy ratings, ten are at hold, and one has a sell.
Institutional interest has been active. Commonwealth Bank of Australia took a new position worth around $503 million. Wellington Management added a stake of roughly $349 million. BlackRock grew its holdings by 89.6% during Q2.
Klarna’s stock has traded between $12.06 and $57.20 over the past year. It currently sits near the lower end of that range, with a market cap of around $7.29 billion and a price-to-earnings ratio of -37.26.
The 50-day moving average is $18.90 and the 200-day moving average is $16.85.
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