Klarna's Stock Down 56% Since IPO Despite Revenue Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 hours ago
0mins
Should l Buy KLAR?
Source: Fool
- Poor IPO Performance: Klarna went public last September, but its stock has dropped 56% since its first-day closing price, failing to meet investor expectations and raising concerns about its future performance.
- Significant Revenue Growth: Despite reporting losses, Klarna's revenue increased by 26% year-over-year in Q3, with a remarkable 48% growth in gross merchandise volume in the U.S., indicating strong customer demand for its services.
- Strong User Growth: Klarna added 27 million new users in Q3, a 32% increase, and accounted for 15% of total global transactions in October, showcasing its growing market penetration.
- Uncertain Profitability Outlook: Although management claims revenue is growing faster than operating expenses, the net loss widened from $4 million to $94 million in Q3, reflecting ongoing financial pressures post-IPO.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy KLAR?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on KLAR
Wall Street analysts forecast KLAR stock price to rise
11 Analyst Rating
9 Buy
2 Hold
0 Sell
Strong Buy
Current: 17.800
Low
36.00
Averages
44.36
High
55.00
Current: 17.800
Low
36.00
Averages
44.36
High
55.00
About KLAR
Klarna Group Plc is a United Kingdom-based technology company focused on developing commerce networks. The Company is an artificial intelligence (AI)-powered global payments network and shopping assistant. It provides consumers and merchants with a range of solutions, including payment, advertising and digital retail banking, through several channels. Its online payments solution is designed to bridge uncertainty in the transactions between consumers and merchants by providing short-term credit to consumers interest-free. Its range of payment options allows consumers to purchase what they choose, both online and offline. Its payment solutions include Pay in Full, Pay Later and Fair Financing. Its Pay in Full instantly settles purchases at the time of the transaction. Its Pay Later enables consumers to purchase goods or services at the time of the transaction and pay the full amount at a later date. Its Fair Financing allows consumers to pay for their purchase over a longer duration.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Klarna Sees Rapid User Growth with Promising Path to Profitability
- Significant User Growth: Klarna added 27 million new users in Q3, a 32% year-over-year increase, bringing the total to 114 million, demonstrating the strong appeal of its buy now, pay later services and solidifying its market position.
- Sustained Revenue Growth: Revenue increased by 26% year-over-year in Q3, with a remarkable 48% growth in gross merchandise volume in the U.S., indicating rising consumer demand for Klarna's services and a promising path to profitability.
- Merchant Partnerships Expansion: The number of merchants using Klarna surged by 38% to 850,000, reflecting its growing influence in the retail sector, particularly with its exclusive partnership with Walmart, which enhances its competitive edge.
- Financial Challenges and Opportunities: Despite a widening net loss from $4 million to $94 million in Q3, management asserts that revenue is growing faster than operating expenses, indicating potential for profitability, with investors advised to watch for the upcoming business update on February 19.
See More
Class Action Lawsuit Filed Against Klarna's IPO
- Lawsuit Background: Bragar Eagel & Squire has filed a class action lawsuit against Klarna in the U.S. District Court for the Eastern District of New York on behalf of investors who purchased Klarna's common stock during its IPO on September 10, 2025, alleging false and misleading statements in the registration statement.
- Loss Disclosure: The lawsuit claims that Klarna failed to adequately disclose the risk of a significant increase in loss reserves shortly after the IPO, resulting in investor losses when the true information became public, highlighting serious deficiencies in the company's risk management practices.
- Stock Price Volatility: Klarna's IPO in September 2025 involved the sale of 34,311,274 shares at $40 each, but following disappointing Q3 results on November 18, 2025, which revealed a staggering rise in credit loss provisions, the stock price fell by 9.3%, from $34.88 to $31.63, indicating market concerns about its financial health.
- Investor Action: Investors must apply by February 20, 2026, to be appointed as lead plaintiffs in the lawsuit, with Bragar Eagel & Squire offering free consultations to assist affected investors in understanding their legal rights and taking necessary actions.
See More
Klarna's Stock Down 56% Since IPO Despite Revenue Growth
- Poor IPO Performance: Klarna went public last September, but its stock has dropped 56% since its first-day closing price, failing to meet investor expectations and raising concerns about its future performance.
- Significant Revenue Growth: Despite reporting losses, Klarna's revenue increased by 26% year-over-year in Q3, with a remarkable 48% growth in gross merchandise volume in the U.S., indicating strong customer demand for its services.
- Strong User Growth: Klarna added 27 million new users in Q3, a 32% increase, and accounted for 15% of total global transactions in October, showcasing its growing market penetration.
- Uncertain Profitability Outlook: Although management claims revenue is growing faster than operating expenses, the net loss widened from $4 million to $94 million in Q3, reflecting ongoing financial pressures post-IPO.
See More
Faruqi & Faruqi Encourages Klarna Investors to Reach Out
- Legal Investigation: Faruq & Faruq LLP is investigating potential claims against Klarna Group plc, particularly for investors who suffered losses exceeding $100,000 during the September 2025 IPO, indicating significant legal risks that could impact the company's market reputation.
- False Statement Allegations: The lawsuit alleges that Klarna and its executives violated federal securities laws by failing to disclose the risk of a substantial increase in loss reserves shortly after the IPO, leading to investor losses when the true information became public, potentially affecting the company's future financing capabilities.
- Declining Financial Performance: Klarna reported a net loss of $95 million in its first earnings report, with loan loss provisions rising to $235 million, exceeding analyst expectations of $215.8 million, highlighting challenges in credit risk management that could negatively impact stock performance.
- Investor Action Call: Faruq & Faruq LLP encourages anyone with information regarding Klarna's conduct, including former employees and shareholders, to contact them to support the ongoing class action lawsuit, indicating that the legal pressure faced by the company may affect its market trustworthiness.
See More
Reminder for Klarna Group Securities Class Action
- Class Action Notice: Rosen Law Firm reminds purchasers of Klarna Group securities regarding a class action lawsuit related to the September 2025 IPO, with a lead plaintiff deadline of February 20, 2026, requiring investors to apply by this date to serve as lead plaintiff.
- Fee Arrangement: Investors joining the Klarna class action are not required to pay any upfront fees, as the law firm operates on a contingency fee basis, thereby reducing the financial burden on investors.
- Lawsuit Details: The lawsuit alleges that the Registration Statement contained false and misleading statements, failing to disclose the significant risk of Klarna's loss reserves increasing within months of the IPO, resulting in investor losses when the true information became public.
- Law Firm Background: Rosen Law Firm specializes in securities class actions and has recovered over $438 million for investors in 2019 alone, being ranked first by ISS Securities Class Action Services in 2017, showcasing its expertise and successful track record in this field.
See More
Reminder for Klarna Group Securities Class Action
- Class Action Notice: Rosen Law Firm reminds purchasers of Klarna Group securities regarding the February 20, 2026 lead plaintiff deadline related to the registration statement from the September 2025 IPO, urging investors to apply by this date to participate in the lawsuit.
- Potential Compensation Opportunity: Investors who purchased Klarna securities may be entitled to compensation without any out-of-pocket costs through a contingency fee arrangement, ensuring their rights are protected in the legal process.
- Overview of Allegations: The lawsuit alleges that the registration statement contained false and misleading statements, failing to disclose that Klarna's loss reserves would significantly increase within months of the IPO, resulting in investor losses once the true information was revealed.
- Law Firm Background: Rosen Law Firm specializes in securities class actions, having recovered over $438 million for investors in 2019 alone, and was ranked No. 1 by ISS Securities Class Action Services in 2017, demonstrating its expertise and successful track record in this field.
See More
Klarna Sees Rapid User Growth with Promising Path to Profitability
- Significant User Growth: Klarna added 27 million new users in Q3, a 32% year-over-year increase, bringing the total to 114 million, demonstrating the strong appeal of its buy now, pay later services and solidifying its market position.
- Sustained Revenue Growth: Revenue increased by 26% year-over-year in Q3, with a remarkable 48% growth in gross merchandise volume in the U.S., indicating rising consumer demand for Klarna's services and a promising path to profitability.
- Merchant Partnerships Expansion: The number of merchants using Klarna surged by 38% to 850,000, reflecting its growing influence in the retail sector, particularly with its exclusive partnership with Walmart, which enhances its competitive edge.
- Financial Challenges and Opportunities: Despite a widening net loss from $4 million to $94 million in Q3, management asserts that revenue is growing faster than operating expenses, indicating potential for profitability, with investors advised to watch for the upcoming business update on February 19.
See More
Class Action Lawsuit Filed Against Klarna's IPO
- Lawsuit Background: Bragar Eagel & Squire has filed a class action lawsuit against Klarna in the U.S. District Court for the Eastern District of New York on behalf of investors who purchased Klarna's common stock during its IPO on September 10, 2025, alleging false and misleading statements in the registration statement.
- Loss Disclosure: The lawsuit claims that Klarna failed to adequately disclose the risk of a significant increase in loss reserves shortly after the IPO, resulting in investor losses when the true information became public, highlighting serious deficiencies in the company's risk management practices.
- Stock Price Volatility: Klarna's IPO in September 2025 involved the sale of 34,311,274 shares at $40 each, but following disappointing Q3 results on November 18, 2025, which revealed a staggering rise in credit loss provisions, the stock price fell by 9.3%, from $34.88 to $31.63, indicating market concerns about its financial health.
- Investor Action: Investors must apply by February 20, 2026, to be appointed as lead plaintiffs in the lawsuit, with Bragar Eagel & Squire offering free consultations to assist affected investors in understanding their legal rights and taking necessary actions.
See More
Klarna's Stock Down 56% Since IPO Despite Revenue Growth
- Poor IPO Performance: Klarna went public last September, but its stock has dropped 56% since its first-day closing price, failing to meet investor expectations and raising concerns about its future performance.
- Significant Revenue Growth: Despite reporting losses, Klarna's revenue increased by 26% year-over-year in Q3, with a remarkable 48% growth in gross merchandise volume in the U.S., indicating strong customer demand for its services.
- Strong User Growth: Klarna added 27 million new users in Q3, a 32% increase, and accounted for 15% of total global transactions in October, showcasing its growing market penetration.
- Uncertain Profitability Outlook: Although management claims revenue is growing faster than operating expenses, the net loss widened from $4 million to $94 million in Q3, reflecting ongoing financial pressures post-IPO.
See More
Faruqi & Faruqi Encourages Klarna Investors to Reach Out
- Legal Investigation: Faruq & Faruq LLP is investigating potential claims against Klarna Group plc, particularly for investors who suffered losses exceeding $100,000 during the September 2025 IPO, indicating significant legal risks that could impact the company's market reputation.
- False Statement Allegations: The lawsuit alleges that Klarna and its executives violated federal securities laws by failing to disclose the risk of a substantial increase in loss reserves shortly after the IPO, leading to investor losses when the true information became public, potentially affecting the company's future financing capabilities.
- Declining Financial Performance: Klarna reported a net loss of $95 million in its first earnings report, with loan loss provisions rising to $235 million, exceeding analyst expectations of $215.8 million, highlighting challenges in credit risk management that could negatively impact stock performance.
- Investor Action Call: Faruq & Faruq LLP encourages anyone with information regarding Klarna's conduct, including former employees and shareholders, to contact them to support the ongoing class action lawsuit, indicating that the legal pressure faced by the company may affect its market trustworthiness.
See More
Reminder for Klarna Group Securities Class Action
- Class Action Notice: Rosen Law Firm reminds purchasers of Klarna Group securities regarding a class action lawsuit related to the September 2025 IPO, with a lead plaintiff deadline of February 20, 2026, requiring investors to apply by this date to serve as lead plaintiff.
- Fee Arrangement: Investors joining the Klarna class action are not required to pay any upfront fees, as the law firm operates on a contingency fee basis, thereby reducing the financial burden on investors.
- Lawsuit Details: The lawsuit alleges that the Registration Statement contained false and misleading statements, failing to disclose the significant risk of Klarna's loss reserves increasing within months of the IPO, resulting in investor losses when the true information became public.
- Law Firm Background: Rosen Law Firm specializes in securities class actions and has recovered over $438 million for investors in 2019 alone, being ranked first by ISS Securities Class Action Services in 2017, showcasing its expertise and successful track record in this field.
See More
Reminder for Klarna Group Securities Class Action
- Class Action Notice: Rosen Law Firm reminds purchasers of Klarna Group securities regarding the February 20, 2026 lead plaintiff deadline related to the registration statement from the September 2025 IPO, urging investors to apply by this date to participate in the lawsuit.
- Potential Compensation Opportunity: Investors who purchased Klarna securities may be entitled to compensation without any out-of-pocket costs through a contingency fee arrangement, ensuring their rights are protected in the legal process.
- Overview of Allegations: The lawsuit alleges that the registration statement contained false and misleading statements, failing to disclose that Klarna's loss reserves would significantly increase within months of the IPO, resulting in investor losses once the true information was revealed.
- Law Firm Background: Rosen Law Firm specializes in securities class actions, having recovered over $438 million for investors in 2019 alone, and was ranked No. 1 by ISS Securities Class Action Services in 2017, demonstrating its expertise and successful track record in this field.
See More
