On Friday, TD Cowen maintained a positive outlook on Klaviyo Inc (NYSE: NYSE:KVYO), reiterating a Buy rating and a price target of $34.00. The firm's analyst highlighted Klaviyo's sustained growth performance amidst the current economic landscape, emphasizing that the company's achievements are not fully recognized by the investor community.
Klaviyo, a marketing technology (MarTech) vendor, is identified as a leader in the space, benefiting from opportunities in new market areas, vendor consolidation, and growth in the upper market segment. According to TD Cowen, Klaviyo is one of the three software companies projected to achieve a growth rate of over 30% for the year.
Despite this strong growth forecast, Klaviyo's valuation is approximately 5 times its expected sales for the calendar year 2025 (EV/CY25E Sales), which is currently the lowest among its peers. The analysis from TD Cowen suggests that this valuation presents an attractive risk/reward scenario for investors considering the company's stock.
The firm's stance on Klaviyo remains optimistic, with the expectation that the company's market position and growth potential are not yet fully reflected in its stock price, indicating a potential undervaluation relative to its industry counterparts.
In other recent news, Klaviyo, Inc. has experienced several significant developments. The software services company recently held its annual meeting, where shareholders elected Andrew Bialecki, Ping Li, and Tony Weisman as Class I directors. Additionally, Deloitte & Touche LLP was ratified as the company's independent auditor for the fiscal year ending December 31, 2024.
In the realm of financial performance, Klaviyo's first-quarter results for 2024 surpassed consensus estimates with revenue and adjusted EBIT figures exceeding expectations by 3.9% and 23.0% respectively. This positive performance has led to Barclays upgrading Klaviyo's stock rating to overweight and increasing the price target to $29. However, Baird adjusted its outlook on Klaviyo, lowering its price target to $35.00 while maintaining an Outperform rating.
Further enhancing its business operations, Klaviyo announced a partnership with TikTok to integrate its customer segmentation tools with the social media platform. This move is expected to streamline the process of ad targeting and improve relationships with potential buyers.
The company has also expanded into SMS in nine countries and introduced new features such as multi-account management systems, which are projected to drive market share gains.
InvestingPro Insights
As TD Cowen maintains a positive stance on Klaviyo Inc (NYSE: KVYO), highlighting its sustained growth and potential undervaluation, real-time data from InvestingPro provides additional context for investors. Klaviyo's market capitalization stands at $5.96 billion, with a notable revenue growth of 43.33% over the last twelve months as of Q1 2024, showcasing the company's strong performance. However, it's worth noting that Klaviyo is not profitable over the same period, with a negative P/E ratio of -18.93. Despite this, the company's gross profit margin is impressive at 75.23%, indicating a strong underlying business model.
InvestingPro Tips further reveal that Klaviyo holds more cash than debt on its balance sheet and that its liquid assets exceed short-term obligations, providing financial stability. Additionally, the company is trading near its 52-week low, which could be an attractive entry point for investors believing in the company's long-term prospects. While six analysts have revised their earnings downwards for the upcoming period, analysts predict the company will be profitable this year. Klaviyo does not pay a dividend, which may be a consideration for income-focused investors.
For those looking to delve deeper into Klaviyo's financials and future prospects, InvestingPro offers additional tips. By using the coupon code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking further insights that could help in making informed investment decisions. With the next earnings date set for August 8, 2024, and a fair value estimate from analysts at $35, compared to InvestingPro's fair value of $26.05, there are multiple factors for investors to consider.
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