Last Update 26 Jan 26

Fair value Decreased 0.40%

KVYO: Co CEO Transition And 2026 Setup Will Support Upside

Analysts have trimmed their price targets on Klaviyo by a few dollars, now centering around the low US$40s. This reflects modest tweaks to fair value, discount rate, revenue growth and margin assumptions, while maintaining a generally constructive view on software heading into 2026.

Analyst Commentary

Bullish Takeaways

Bullish analysts view the recent trims to price targets, such as the move to the low US$40s, as fine tuning of models rather than a negative call on the business, maintaining a constructive stance on the stock.
Expectations for stable macro conditions and IT spending into 2026 support the idea that Klaviyo can continue executing against its growth plans without needing a major reset to demand assumptions.
Some see current software sector valuations as relatively low, which can make Klaviyo look more interesting on a risk reward basis if the company delivers on existing revenue and margin expectations.
The reaffirmed positive ratings, alongside slightly lower targets, suggest confidence in the business model, with price changes tied more to sector wide frameworks than to Klaviyo specific concerns.

Bearish Takeaways

Bearish analysts point to the US$4 pullback in some price targets as a sign that prior assumptions on fair value, discount rates, or growth may have been too optimistic.
There is caution that, even with a supportive view on software into 2026, execution missteps on revenue growth or margins could quickly erode the limited upside implied by targets clustered in the low US$40s.
Lowered targets highlight sensitivity to sector sentiment and valuation frameworks, which could weigh on the shares if broader software multiples compress further.
Some investors may interpret the incremental cuts to targets as a reason to be more measured on position sizing, given that upside now appears more tightly linked to consistent execution than to multiple expansion.

What's in the News

The Board approved a Second Amended and Restated Bylaws update on December 8, 2025, which allows Klaviyo to have up to two Chief Executive Officers under Article III (company filing).
Klaviyo appointed Chano Fernández as co-CEO, effective January 1, 2026, serving alongside Co-Founder Andrew Bialecki, following his prior role as Interim Executive Officer and his experience at Workday and other enterprise software firms (company filing).
For full year 2025, Klaviyo issued financial guidance for revenue of US$1.215 billion to US$1.219 billion, with a stated year-over-year growth rate of 30% (company guidance).
For the fourth quarter ending December 31, 2025, Klaviyo guided to revenue of US$331.0 million to US$335.0 million, with a stated year-over-year growth rate of 23% to 24% (company guidance).

Valuation Changes

Fair Value: Adjusted slightly from US$43.48 to US$43.30 per share, reflecting a small refinement in the underlying model assumptions.
Discount Rate: Ticked down marginally from 8.47% to 8.45%, indicating a very small change in the assumed risk profile or required return.
Revenue Growth: Held essentially steady, moving from 21.12% to 21.11%, suggesting only a minor recalibration of top line expectations.
Profit Margin: Increased modestly from 2.69% to 2.89%, pointing to a slightly higher assumed profitability level in future periods.
Future P/E: Brought down from 371.64x to 344.54x, indicating a lower multiple applied to projected earnings, while still implying a very large valuation relative to current earnings power.

International expansion, product innovation, and upmarket moves position Klaviyo for sustained topline growth, higher customer retention, and margin improvement.
Growing regulatory focus on first-party data and marketing stack consolidation strengthens Klaviyo's competitive edge and broadens its market opportunity.
Margin pressures, product uncertainty, customer volatility, fierce competition, and reliance on key partners all threaten Klaviyo's long-term growth and profitability outlook.

Catalysts

About Klaviyo

A technology company, provides a software-as-a-service platform in the United States, other Americas, the Asia-Pacific, Europe, the Middle East, and Africa.What are the underlying business or industry changes driving this perspective?

Growing international expansion, supported by new language rollouts, local channel integrations (e.g., WhatsApp), and localization efforts, is driving strong topline growth (e.g., 42% international revenue growth YoY), with further penetration of both SMB and enterprise segments likely to expand future revenue and earnings.
The regulatory and technical shift away from third-party cookies and toward first-party data benefits Klaviyo's unified, vertically integrated platform, positioning them to capture more wallet share from brands seeking compliant, data-driven personalization solutions-supporting future revenue and margin resiliency.
The rapid innovation and rollout of new AI-first products-including Conversational Agent, Helpdesk, and analytics-expands Klaviyo's addressable market from just marketing automation into broader B2C CRM and customer service, setting up significant opportunities for higher ARPU and long-term revenue growth.
Accelerating digital transformation among SMBs and the company's move upmarket into enterprise/mid-market customers (as demonstrated by record adds to the $50k+ ARR cohort) reduce revenue concentration risk and support more stable, recurring revenue and operating margin improvement as Klaviyo achieves greater scale.
The trend of marketing stack consolidation, with brands seeking integrated platforms to unify data and automate consumer engagement across marketing and service, favors Klaviyo's data-centric ecosystem, lowering customer churn and driving higher net margins through improved retention and cross-sell opportunities.

Klaviyo Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Klaviyo's revenue will grow by 21.4% annually over the next 3 years.
Analysts assume that profit margins will increase from -6.2% today to 4.6% in 3 years time.
Analysts expect earnings to reach $88.3 million (and earnings per share of $0.27) by about September 2028, up from $-66.7 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 244.9x on those 2028 earnings, up from -140.5x today. This future PE is greater than the current PE for the US Software industry at 36.6x.
Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.43%, as per the Simply Wall St company report.

Klaviyo Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Higher infrastructure and SMS channel costs are pressuring gross margins, and management indicated that future growth in SMS/RCS/WhatsApp will likely keep gross margins flat or potentially declining in the near term, which could weigh on long-term profitability and net margins.
The success of new service products (like the AI Helpdesk, Customer Hub, and Conversational Agent) is uncertain, as they are currently in beta and not expected to materially impact revenue or margins in the short-to-medium term, increasing the risk that anticipated product expansion does not deliver projected revenue or earnings growth.
Klaviyo's historic and ongoing strong reliance on SMB and entrepreneur customers exposes it to higher volatility and potential churn during macroeconomic downturns-creating topline risk and margin compression during periods of economic or e-commerce softness.
Intensifying competition from consolidated cloud suites (Salesforce, Adobe, HubSpot) and emerging AI-native marketing platforms could commoditize marketing automation and customer data solutions, pressuring Klaviyo's pricing power, customer retention, and long-term revenue/profit growth.
Dependence on partner ecosystems and integrations (with platforms like Shopify and WooCommerce) creates potential operational and competitive risks-if key partners introduce competing solutions or if Klaviyo's integration lags industry standards, customer loss and slower revenue expansion may result.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $46.2 for Klaviyo based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $60.0, and the most bearish reporting a price target of just $37.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.9 billion, earnings will come to $88.3 million, and it would be trading on a PE ratio of 244.9x, assuming you use a discount rate of 8.4%.
Given the current share price of $31.23, the analyst price target of $46.2 is 32.4% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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