Klarna (KLAR) shares dropped 6.1% to $19.53 on Monday, the day before the buy-now-pay-later company is set to release its second-quarter earnings report. The stock had closed the prior session at $20.79.

The Stockholm-based fintech, founded in 2005, is one of the largest players in a BNPL market that also includes Affirm, Block's Afterpay and PayPal. It has been listed on the New York Stock Exchange only since September 2025, when its IPO priced at $40 per share — leaving Monday's close at less than half its debut level.

Trading was unusually quiet ahead of the print. Volume came in at roughly 887,765 shares, about 84% below Klarna's average daily volume of 5.3 million.

The decline came ahead of Tuesday's pre-market earnings release, with investors watching closely to see whether the company can keep narrowing its losses.

What Wall Street Expects

For the June quarter, Wall Street is projecting an adjusted loss of $0.05 per share on revenue of $992.8 million. If those estimates hold, the results would mark a 61.5% year-over-year improvement in losses alongside 20.6% revenue growth.

The quarter would nonetheless represent a step back from the first three months of the year, when Klarna posted revenue of $1 billion and a loss of just $0.01 per share — a substantial beat against the $0.20 loss analysts had expected.

Heading into the report, EPS estimates have risen 11.29% over the past 60 days, a sign that analysts are gradually warming to Klarna's path toward profitability. Because BNPL profitability is closely tied to consumer credit performance, loan-loss provisions and funding costs will be watched alongside the headline numbers.

Banking License Bid in Focus

One of the bigger storylines heading into earnings is Klarna's push for a U.S. banking charter. In early July, the company filed applications with the Utah Department of Financial Institutions and the FDIC to establish Klarna Bank USA.

The move is part of a broader wave of BNPL and digital lending firms seeking banking licenses in 2026. Fintechs that have already crossed that threshold — LendingClub became a bank holding company in 2021 and SoFi secured a national bank charter in 2022 — have cited cheaper deposit funding as the central benefit, which is why these applications draw close market attention. But not everyone is convinced that a charter would be a game changer for Klarna specifically.

Needham analyst Kyle Peterson, who carries a hold rating on the stock, noted that Klarna has held a banking license in Europe since 2017. That existing license limits the funding cost advantages a U.S. charter might otherwise provide. Peterson wrote that Klarna will “ultimately receive less EPS accretion relative to peers that do not currently have access to deposit funding for loans.”

De novo bank charter applications have historically taken a year or more to move from filing to approval, so any management commentary on the Utah and FDIC review timeline is likely to be a focal point of the earnings call.

Analyst Ratings and Price Targets

Analysts are broadly positive on the stock. The consensus rating sits at “Moderate Buy,” with a mean price target of $24.55 — implying roughly 18% upside from Monday's close. A separate data set puts the average target at $32.28.

Recent analyst activity includes JPMorgan raising its price target from $20 to $22 alongside an overweight rating, while TD Cowen lifted its target from $17 to $19 with a hold rating. Barclays initiated coverage with an equal weight rating and a $20 target. Zacks downgraded the stock from strong buy to hold on August 5.

Across the analyst community, one rates the stock a strong buy, eleven assign buy ratings, ten are at hold, and one has a sell rating.

Institutional Positioning

Institutional interest has been active. Commonwealth Bank of Australia took a new position worth around $503 million, while Wellington Management added a stake of roughly $349 million. BlackRock grew its holdings by 89.6% during the second quarter.

Trading Snapshot

Over the past year, Klarna's stock has traded between $12.06 and $57.20, and it currently sits near the lower end of that range. The company carries a market capitalization of around $7.29 billion and a price-to-earnings ratio of -37.26. Its 50-day moving average stands at $18.90, while the 200-day moving average is $16.85.

Source: CoinCentral