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On Wednesday, Benchmark analyst Mark Zgutowicz increased the price target on Klaviyo Inc (NYSE: NYSE:KVYO) to $51.00, up from the previous $40.00, while keeping a Buy rating on the company’s shares. The stock has shown impressive momentum, with a 46.53% return over the past six months, and currently trades near its 52-week high of $49.55. According to InvestingPro data, analyst targets for the stock range from $36 to $60. The adjustment comes as Klaviyo is scheduled to report its fourth-quarter earnings after the market closes today.
Zgutowicz’s forecast for Klaviyo’s fourth-quarter earnings is optimistic, anticipating total revenue at the high end of the company’s guidance and adjusted operating income at the midpoint. The company maintains impressive gross profit margins of 77.61% and has demonstrated strong revenue growth of 35.41% over the last twelve months. Despite last quarter’s flat adjusted operating income margin outlook for 2025, which was attributed to investments in new products and market expansion, the analyst expects to see evidence of Klaviyo’s progress in the up-market segment in the near term. InvestingPro analysis reveals 14 additional key insights about Klaviyo’s financial health, which currently rates as "GOOD" with a score of 2.84. This progress is anticipated to provide clarity on the company’s long-term operating leverage potential.
The analyst’s positive outlook is further supported by expectations of a fourth-quarter revenue beat, based on Klaviyo’s history of surpassing guidance and recent Enterprise customer additions. According to third-party data sources, since the third quarter, Klaviyo may have gained new customers that collectively represent around $20 billion in annualized gross merchandise value, including potential Enterprise wins from platforms other than Shopify (NYSE:SHOP) Plus, such as custom coded platforms, Salesforce (NYSE:CRM), and Magento. With a current market capitalization of $12.67 billion, Klaviyo maintains a strong balance sheet with more cash than debt, as highlighted in InvestingPro’s comprehensive research report, available for over 1,400 US stocks.
During Klaviyo’s earnings call, analysts are keen to learn about the company’s revenue exposure to Shopify for 2024 compared to 78% in 2022 and 2023. Any shift towards a more diverse customer base, including non-Shopify Plus wins, could indicate a new catalyst for Enterprise growth. Additionally, updates on the impact of small and medium-sized business (SMB) headwinds in the fourth quarter versus the near term will be sought, which could signal when the net revenue retention rate may stabilize.
In other recent news, KeyBanc Capital Markets maintained its Overweight rating on Klaviyo Inc and increased the price target to $45.00, up from the previous $42.00. This adjustment reflects Klaviyo’s robust momentum and the strength observed in the software sector. The decision to raise the price target is based on an updated terminal multiple and a comprehensive analysis that included a 10-year Discounted Cash Flow and Free Cash Flow to the Firm per Share. KeyBanc’s methodology incorporated several financial metrics, including a beta of 1.7 and a discount rate of 14.6%. Additionally, a terminal multiple of 28 times was used in their calculations. The new price target suggests a Calendar Year 2026 Enterprise Value to Revenue multiple of 9.6 times and an EV/FCFF multiple of 66.7 times. These figures indicate a premium compared to the broader software sector averages, which are 7.3 times and 38.6 times, respectively. Currently, Klaviyo’s stock is trading at 8.2 times CY26 EV/revenue and 57.7 times CY26 EV/FCFF.
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