KLAR Stock Forecast & Price Target

Klarna has demonstrated significant growth, with the number of merchants increasing by over 201,000, representing a 34% year-over-year rise in the second quarter, highlighting its appeal to retailers seeking enhanced payment solutions. Improvement in net charge-offs since 2022 indicates a maturation in Klarna's underwriting models, particularly as operations expand in key markets such as the US and the UK. Furthermore, the buy now, pay later (BNPL) payment value in the United States is projected to reach $116.7 billion this year, growing at a 12% compound annual growth rate (CAGR) to $163.8 billion by 2028, suggesting a robust market opportunity for Klarna's services.

Klarna reported realized losses of 0.45% of gross merchandise volume (GMV) in the second quarter of 2025, reflecting a decline of 3 basis points year-over-year, which indicates ongoing issues with credit risk management. Furthermore, the company's GMV per merchant has been declining over recent quarters, attributed to new partnerships with payment service providers that have attracted smaller retailers, potentially diluting overall sales performance. This trend suggests growing pressures on Klarna’s business model as it increasingly relies on a broader but less lucrative merchant base amid an evolving payments landscape.