KVYO just delivered its best quarter on record. Revenue grew 28% year-over-year to $358 million, ahead of the $348 million consensus. Non-GAAP operating margin hit 16%, the highest in the company's history. Management raised full-year revenue guidance to $1.514–$1.522 billion. Yet the morning after, almost every analyst covering the name cut their price target — and the stock is trading at $23.33, still well below where most of those targets now sit.
The post-earnings positioning tells a cautiously bullish story. Short interest has been on a steady retreat. It peaked near 15.5 million shares in late March and has unwound roughly 19% over the past month to 9.1% of the free float — a meaningful de-crowding ahead of the print. That retreat accelerated into the report, with the week's net change running at –2.9%. Borrow conditions reflect the same easing: cost to borrow is running at 0.44%, down sharply from 0.69% at the end of March. Availability in the lending pool has also loosened considerably, with the borrow market nowhere near the tightness it showed earlier in the year when utilization was close to its 52-week high of 19%. The message from the lending market is that positioned shorts were covering, not adding — and the earnings result has not reversed that.
Options traders called the move correctly. The put/call ratio collapsed to 0.36 on May 5 — almost three standard deviations below its 20-day average of 0.45, and close to the lowest level of the past year. That kind of skew toward calls is unusual and was evident before the earnings print, suggesting the options market was positioned for a beat. With the 17% weekly rally now in, the question is whether that bullish options tilt persists or reverts toward the historical mean of roughly 0.45.
The Street is uniformly bullish on rating — every firm that moved on Wednesday maintained a Buy or Overweight — but the target cuts tell a different story about near-term expectations. Six firms lowered targets on the same day Citi raised its to $31. Barclays trimmed to $25, Wells Fargo to $26, and Piper Sandler to $26. The mean target across coverage now stands at $29.73, representing about 27% upside to the current price. The bull case rests on Klaviyo's record free cash flow — $87.4 million in the quarter, a 25% margin — its expanding AI agent suite in Composer, and accelerating enterprise deal momentum. The bear case centres on margin expansion that is still modest in absolute terms and the risk that AI product adoption runs slower than management's optimism implies. Factor scores suggest the Street's forward earnings revisions have been running strong, with the 12-month forward EPS growth ranking in the 93rd percentile across the universe — but the EPS surprise rank is only in the 22nd percentile, meaning execution against elevated expectations is where Klaviyo typically comes up short.
One thread that deserves attention is the CFO transition buried in Tuesday's release: Amanda Whalen, who had also been selling shares in April, will step down by August 21. Co-founder and Co-CEO Andrew Bialecki sold approximately $13 million worth of stock in the six weeks between mid-March and mid-April — all at prices between $16.94 and $19.60, well below where the stock closed this week. The aggregate 90-day net insider selling exceeds $41 million. That insider supply came into a market where the stock was already under pressure; with the price now at $23.33 and a CFO change in train, the insider angle will be worth monitoring through the Q2 setup.
The next scheduled print is June 9. Between now and then, the degree to which the options market sustains its call-heavy skew — and whether short interest continues its downward drift from the March peak — will be the clearest indicators of how the market is digesting a beat-and-raise quarter that the Street rewarded with lower targets.
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