KVYO heads into its Q1 2026 earnings print riding a 17% weekly rally — but the sharper story is what the options market is saying about the direction of that momentum.
Options positioning is as bullish as it has been in a year. The put/call ratio dropped to 0.36 on May 5, nearly three standard deviations below its 20-day average of 0.45 — the lowest reading since the 52-week trough of 0.27. That is not defensive hedging into the print. It is a concentrated call-side bet. The stock has recovered 22% over the past month to $23.33, erasing much of the damage from February's post-earnings drop of 12.5%, and options traders appear to be leaning into that recovery rather than protecting against a reversal.
The short side tells a quieter story. Short interest has fallen sharply since early April, dropping from roughly 15.4 million shares to 12.5 million — a decline of nearly 20% over the month — and now represents just over 9% of the free float. The borrow market is loose: availability is wide and cost to borrow has eased to 0.46%, down more than 23% over the past month. The short score has also been drifting lower, from 51.3 on April 27 to 46.2 by May 4. Short sellers have been covering into the rally, not building into it.
The bull and bear debate centres on whether Klaviyo's growth profile justifies the re-rating. Bulls point to record free cash flow of $87.4 million, a 25% FCF margin, and management guidance for 21–22% revenue growth in FY26 with expanding non-GAAP operating margins. The company's AI integrations, international expansion, and deepening enterprise traction underpin the optimism. EPS estimates for the next twelve months rank in the 93rd percentile for year-on-year growth, and analyst recommendations skew notably positive — the consensus recommendation differential ranks in the 94th percentile of the universe. Bears focus on profitability pace rather than trajectory: margin expansion remains gradual, new AI product adoption carries execution risk, and mobile uptake may lag internal projections. Analysts have broadly maintained buy ratings but cut targets materially since February — Citigroup trimmed to $29 from $40 as recently as April 28 — leaving the mean target at $32. That implies roughly 37% upside from the current price, though targets have been moving in one direction all year.
One angle worth watching is the founder's sell programme. Co-CEO Andrew Bialecki sold roughly 900,000 shares between mid-March and mid-April at prices in the $16–$20 range — well below today's level — totalling approximately $15 million in disclosed transactions. The stock has since rallied more than 35% from those sale prices, a timing outcome that bears noting without over-reading. Meanwhile, SHOP remains a meaningful holder at 5.6% and actually added shares in late April, a detail that provides some institutional validation of the platform's strategic relevance.
The print will test whether the operational momentum baked into the options market's bullish tilt — and the analyst community's resilient buy ratings — is matched by the actual Q1 revenue and margin trajectory Klaviyo reports after the close today.
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