Klarna Group reports its first earnings as a public company on May 19, and the setup carries more tension than the headline price suggests.
The stock fell nearly 8% on Friday to $15.17 — a sharp reversal that left it more than 30% below the analyst consensus target of ~$22.78. That gap is not a rounding error. Goldman Sachs raised its target to $21 on Friday while maintaining its Buy rating. Keefe, Bruyette & Woods lifted to $26. Wells Fargo cut to $26 from $32, keeping its Overweight. The direction of travel is mixed: multiple firms raised targets into Friday's drop, yet Wells Fargo's trim signals some caution on the price the stock can sustain. Consensus firmly remains constructive, with the Street-wide return potential now above 35% from current levels — notable for a stock that is down 43% year-to-date.
The short-selling picture adds another layer. At 7.4% of the free float, short interest is meaningful for a newly listed name. It has drifted down roughly 5% over the past week to about 28 million shares, suggesting some bears covered into the print rather than pressing the trade. The ORTEX short score holds at 71.4, near the top quartile of the broader universe, consistent with an actively debated name in the lending market. Borrowing costs have fallen sharply — from above 8% in early April to 2.5% now — signalling that the cost of maintaining a short position has eased considerably. Borrow availability, however, remains tight relative to overall short interest, with around 80% of available shares already on loan. That limits how quickly new short positions can be built at current rates.
Options positioning leans mildly bullish. The put/call ratio runs at 0.67, fractionally below its 20-day average of 0.69 — a neutral-to-slightly-constructive read with no statistical extremity in either direction. That contrasts with the elevated fear visible in April, when the PCR sat above 1.0 for a sustained stretch. The shift toward calls is consistent with some buyers positioning for an upside surprise. EPS surprise ranks in the 95th percentile historically, and 30-day EPS momentum is in the 92nd percentile — both suggesting the company has a track record of delivering better-than-expected numbers.
The bull case centres on accelerating US and UK merchant growth, improving credit quality through better underwriting, and a BNPL market projected to reach $116.7 billion in the US this year. Bears flag declining GMV per merchant as newer, smaller PSP partnerships dilute the mix, and question whether the valuation multiple — a trailing P/E above 45x on slim net income of ~$46 million — leaves enough margin for error. The ownership base is concentrated: Sequoia controls roughly 16%, founder Sebastian Siemiatkowski holds 6.5%, and pre-IPO investors including SoftBank and Silver Lake together account for nearly 8%. With a lockup structure still relatively fresh, the composition of the register matters as much as the print itself.
Monday's report is the first earnings test for Klarna as a public company, and the market will be asking whether its growth trajectory at scale justifies a multiple that currently has more faith built in than the share price reflects.
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