Spike in Credit Loss Provisions: Klarna's Q3 2025 financial results revealed a staggering 102% year-over-year increase in credit loss provisions, prompting an investigation into whether the company misled investors, which could undermine market trust.
Decline from IPO Price: Since its IPO at $40 per share on September 9, 2025, Klarna's stock has dropped approximately 23.6%, indicating growing concerns about its financial health that may affect future fundraising capabilities.
Risks of Fair Financing Expansion: The 139% growth in Klarna's Fair Financing portfolio was not adequately disclosed regarding its adverse impact on credit loss provisions, potentially misleading investors about the company's risk profile and harming its reputation.
Potential Legal Consequences: Hagens Berman is investigating whether Klarna failed to disclose risks associated with credit losses in its offering documents, and if substantiated, this could lead to legal liabilities and compensation claims against the company.
KLAR
$30.25+Infinity%1D
Analyst Views on KLAR
Wall Street analysts forecast KLAR stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for KLAR is 47.53 USD with a low forecast of 39.00 USD and a high forecast of 55.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
16 Analyst Rating
Wall Street analysts forecast KLAR stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for KLAR is 47.53 USD with a low forecast of 39.00 USD and a high forecast of 55.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Buy
3 Hold
0 Sell
Strong Buy
Current: 31.100
Low
39.00
Averages
47.53
High
55.00
Current: 31.100
Low
39.00
Averages
47.53
High
55.00
Citi
Buy
downgrade
$58 -> $45
2025-11-20
Reason
Citi
Price Target
$58 -> $45
2025-11-20
downgrade
Buy
Reason
Citi lowered the firm's price target on Klarna to $45 from $58 and keeps a Buy rating on the shares. the firm dropped the target post the earnings report but believes Klarna continues to see "outsized growth" across its business.
UBS
Timothy Chiodo
Buy
downgrade
$48 -> $46
2025-11-20
Reason
UBS
Timothy Chiodo
Price Target
$48 -> $46
2025-11-20
downgrade
Buy
Reason
UBS analyst Timothy Chiodo lowered the firm's price target on Klarna to $46 from $48 and keeps a Buy rating on the shares. Klarna's Q3 results showed strong momentum, with GMV and revenue both growing more than 20% year over year and outperforming expectations, supported by merchant network expansion, key retail partnerships, PSP integrations, and rapid Klarna Card adoption, the analyst tells investors in a research note. Improved transaction margins and operating leverage narrowed operating losses, suggesting a clearer path toward profitability as the business shifts toward higher-take-rate geographies and products, UBS says.
JPMorgan
Overweight
maintain
$50 -> $45
2025-11-19
Reason
JPMorgan
Price Target
$50 -> $45
2025-11-19
maintain
Overweight
Reason
JPMorgan lowered the firm's price target on Klarna to $45 from $50 and keeps an Overweight rating on the shares post the Q3 report. The company reported record gross merchandise volume, stable credit trends and a successful Klarna Card launch, but the shares pulled back on "inflated" consensus estimates and higher provision expense related to the fair financing ramp and mix into new markets, the analyst tells investors in a research note. The firm trimmed estimates post the print but is "encouraged" by Klarna's "stable" realized loss rates and early-stage delinquency rates.
Wolfe Research
Outperform
to
NULL
downgrade
$50 -> $45
2025-11-19
Reason
Wolfe Research
Price Target
$50 -> $45
2025-11-19
downgrade
Outperform
to
NULL
Reason
Wolfe Research lowered the firm's price target on Klarna to $45 from $50 and keeps an Outperform rating on the shares. Despite the post-earnings selloff, the company's Q3 report beat across metrics and included a Q4 outlook above expectations, the analyst tells investors in a research note. Wolfe came away from the print "constructive" on Klarna's growth opportunities, card momentum, and operating leverage potential.
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.
