Bullish Klaviyo Analyst Cites 3 Main Catalysts That Bode Well For Stock In 2024

Shares of Klaviyo Inc KVYO climbed in premarket trading on Monday.

The stock’s 22% underperformance over the past three months offers “a buying opportunity,” especially with several catalysts for 2024 that could unlock equity value, according to Goldman Sachs.

The Klaviyo Analyst: Gabriela Borges upgraded the rating for Klaviyo from Neutral to Buy, while keeping the price target unchanged at $36.

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The Klaviyo Thesis: Although the stock could remain volatile over the next 60 to 90 days, as there is greater clarity around the impact of email spam filtering on the company’s business, “we see a compelling path to stock outperformance over a 12-month time frame,” Borges said in the upgrade note.

The analyst cited three main catalysts for 2024:

• The concerns around disruption to Klaviyo’s business model from the ongoing changes to email spam filtering appear to be overdone. “We look for more detail post the company’s 4Q EPS report on 2/27 and expect that solid 4Q results and additional information on these changes will help refute the near-term bear case on the stock,” she wrote.
• Klaviyo could continue to gain market share, given its “differentiated approach to the software infrastructure underpinning its marketing application,” Borges stated.
• These is upside to estimates even considering “any near-term downsizing of customer contracts given company-specific drivers (upmarket gains, ongoing Shopify Plus penetration, new products) and an overall still-stable consumer spending environment,” she added.

KVYO Price Action: Shares of Klaviyo rose by 4.8% to $29.01 in premarket trading on Monday.

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