Klaviyo Inc. (NYSE: KVYO) has seen a notable price movement today, climbing over 3% to trade at $35.95 in the morning session.
This comes after Benchmark initiated coverage with a Buy rating and set a price target of $42, suggesting a potential upside of 19% from its last close.
According to Benchmark analyst Mark Zgutowicz, Klaviyo’s platform is well-positioned to benefit from key drivers in the mid-market and enterprise sectors.
The brokerage believes Klaviyo’s strength lies in its ability to unify various marketing tech stack components, including email, SMS, CDP, and AI/ML, which enhances customer engagement and returns on ad spend.
Klaviyo stock: strong quarterly performance boosts price
Klaviyo has had an eventful year so far, with the stock already up nearly 27%, outperforming the S&P500’s 28% gain.
This upward trend was reinforced by its robust second-quarter results, which saw the company beat earnings estimates and revise its full-year revenue guidance upward.
Klaviyo reported a 35% year-over-year revenue growth in Q2, reaching $222.2 million, and delivered $41 million in operating cash flow.
The company’s free cash flow of $37 million indicates strong financial health, further supported by its $790 million cash balance.
Klaviyo’s management attributed the results to a record number of net-new $50K ARR customers and international expansion, where revenue grew by nearly 40%.
Klaviyo’s second-quarter performance led to upgrades from several analysts, including KeyBanc, which moved the stock to Overweight with a $33 price target.
During Q2, Klaviyo added nearly 2,400 customers with an ARR of over $50,000, marking a 64% increase from the prior year.
Klaviyo stock: $50K ARR clients growing steadily
The company also raised its revenue guidance for FY24 to $910-$918 million, signaling confidence in its ability to maintain strong growth.
Looking deeper into Klaviyo’s business fundamentals, the company has capitalized on its AI-driven platform to differentiate itself in the highly competitive marketing automation space.
The integration of customer data across multiple touchpoints, such as email, SMS, and AI-driven campaign tools, offers clients a streamlined solution that rivals larger competitors like HubSpot and Salesforce.
This has been a key factor in attracting higher-value customers, with the number of $50K ARR clients growing steadily.
Furthermore, Klaviyo’s gross margins have expanded to 79%, reflecting improved operational efficiency.
Expensive valuation compared to peers
The stock trades at nearly nine times forward revenues and 65 times forward earnings, making it relatively expensive compared to peers.
However, its impressive growth rate and consistent cash flow generation justify a premium valuation to some extent.
Klaviyo’s strategic partnership with Shopify, which holds a 15% stake, adds a layer of growth potential, especially as both companies continue to expand their customer base.
Klaviyo’s price-to-sales ratio, currently at the top end of its historical range, has led some to argue that the stock is trading at a discount relative to its growth potential.
Barclays, for instance, upgraded Klaviyo in June, citing an undervaluation relative to its peers in the SaaS space.
With an estimated 25% year-over-year revenue growth in 2025, Klaviyo’s forward-looking metrics appear favorable, especially considering its growing international footprint and expanding customer base.
Klaviyo’s ability to innovate and incorporate AI and machine learning into its platform continues to drive demand.
The company’s introduction of new AI features, such as Flows AI, has further enhanced its competitive advantage by automating campaign workflows and improving customer engagement.
This focus on product development, along with its data-driven approach, positions Klaviyo well to capture market share in the rapidly evolving digital marketing space.
With Klaviyo’s recent momentum fueled by strong earnings, analyst support, and ongoing innovation, it’s clear that the company is making impressive strides.
The question now is whether this upward trend is sustainable in the near term, particularly as the stock edges closer to its newer highs.
To gain deeper insights into potential price movements and identify key support and resistance levels, it’s important to take a closer look at how the technical indicators are shaping up.
Let’s see what the charts have to say about Klaviyo’s stock price trajectory.
Klaviyo stock: bulls back in charge
Klaviyo made its debut as a public company in September last year and its stock reached its all-time high at $39.47 on the listing day itself.
However, it entered a slow and steady bearish phase soon after which lasted until early August before the company released its Q2 earnings.
Source: TradingView
Following the Q2 earnings, the stock witnessed a massive surge, and the upmove since then has brought it back to levels above $35 currently.
Taking this upward momentum into account, investors who are bullish on the company may initiate long positions at current levels with a trailing stop loss below the stock’s 100-day moving average.
Traders who have a bearish view of the stock must hold back on initiating short positions at current levels.
They can consider going short only if the stock gives a daily closing below its recent swing low near $29.9 or its 100-day moving average.
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