On Friday, Piper Sandler, a financial services company, updated its outlook on shares of klaviyo Inc (NYSE:NYSE:), raising the price target to $45.00 from $34.00 previously.
The firm maintained its Overweight rating on the company’s shares. The review reflects a positive view of the company’s growth trajectory, as Klaviyo’s annual recurring revenue (ARR) is expected to exceed $1 billion, with an anticipated growth rate of more than 28% year-over-year. at the end of the year.
Klaviyo’s platform, which provides marketing tools that leverage data to improve revenue streams across multiple channels such as SMS, email and mobile push, is currently used by over 151,000 retail brands. Notable clients include Vuori, Unilever (LON:) and Mattel (NASDAQ:).
The analyst noted that new features and integrations with platforms such as Shopify (NYSE 🙂, Canva, TikTok, Pinterest (NYSE 🙂) and Meta (NASDAQ 🙂 could significantly impact sales during the upcoming Black Friday Cyber Monday (BFCM) season.
The company’s international prospects are also improving, with planned expansions in language support. Klaviyo, which currently supports English and French, aims to include German, Spanish, Italian, Korean and Portuguese to serve a broader global customer base. This move is expected to boost the company’s international expansion efforts over the next year.
Piper Sandler expressed increased confidence in Klaviyo’s ability to maintain a growth rate above 25% and achieve an operating margin model of 10% or higher. The updated $45 price target is indicative of this optimism and the potential the financial services firm sees in the company’s strategic initiatives and market position.
In other recent news, Klaviyo’s strong financial performance and strategic initiatives have attracted attention. Klaviyo’s revenue beat estimates by $10 million and operating profits increased 65% year over year.
Several analyst firms, including Baird and Benchmark, have reacted positively to these developments. Baird raised his price target on Klaviyo shares in anticipation of a strong third-quarter earnings report. Benchmark initiated coverage of Klaviyo stock with a Buy rating, emphasizing the company’s strategic integration of various marketing technologies.
Additionally, KeyBanc Capital Markets upgraded Klaviyo stock to Overweight due to the company’s strong growth trajectory. Barclays and TD Cowen also showed confidence in Klaviyo’s growth prospects, upgrading the stock to Overweight and maintaining a Buy rating, respectively.
In addition to its financial performance, Klaviyo has announced a partnership with TikTok to integrate its customer segmentation tools with the social media platform. This move is expected to improve ad targeting and improve relationships with potential buyers. These are just some of the recent events that have kept Klaviyo in the spotlight.
InvestingPro Insights
Klaviyo’s strong market position and growth potential, as highlighted by Piper Sandler’s improved price target, are further supported by real-time data from InvestingPro. The company’s revenue growth remains strong, with a trailing twelve month increase of 38.38% as of Q2 2024 and quarterly growth of 35.01% in Q2 2024. This is aligns with analysts’ expectations of continued strong growth.
InvestingPro advice reveals that Klaviyo has more cash than debt on its balance sheet, indicating a solid financial foundation to support its expansion plans. Additionally, nine analysts have revised upward their earnings for the coming period, suggesting growing confidence in the company’s near-term performance.
The stock’s recent performance has been particularly notable, with a solid 49.38% return over the past three months and a substantial 63.93% return over the past six months. This momentum has led the stock to trade near its 52-week high, with the current price 98.06% off that high.
While these metrics paint a positive picture, investors should note that Klaviyo is currently trading at a high earnings valuation multiple and is not yet profitable in the trailing twelve months. However, analysts predict the company will be profitable this year, which could be a major catalyst for the stock.
For readers interested in a more comprehensive analysis, InvestingPro offers 11 additional tips for Klaviyo, which provide a deeper understanding of the company’s financial health and market position.
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