KLAR Stock Forecast & Price Target

Klarna Group PLC has demonstrated substantial growth, with the number of merchants increasing by over 201,000, a 34% year-over-year rise in the second quarter, showcasing its ability to attract new retailers to its payment solutions. Additionally, there has been a marked improvement in net charge-offs since 2022, attributable to the enhanced maturity of Klarna’s underwriting models as its operations scale in key markets like the US and UK. Furthermore, the projected growth in the buy now, pay later market in the United States, estimated to reach $116.7 billion this year and grow at a 12% compounded annual growth rate to $163.8 billion by 2028, positions Klarna favorably within an expanding sector.

Klarna Group PLC has reported a realized loss of 0.45% as a percentage of Gross Merchandise Value (GMV) in the second quarter of 2025, marking a slight decline of 3 basis points year-over-year. Additionally, the company's GMV per merchant has been decreasing in recent quarters, likely due to strategic partnerships with Payment Service Providers (PSPs) that are prioritizing smaller retailers over larger brands. This combination of stagnant or declining key financial metrics raises concerns about Klarna's growth potential and overall financial health in an increasingly competitive market.