Stephens adjusted its price target for Klaviyo Inc (NYSE:KVYO) downward to $31.00 from $43.00 on Wednesday, while continuing to carry an Overweight recommendation on the marketing automation firm. At the time of the note, the share price was reported at $21.12, which sits well below the revised target.
Third-party InvestingPro metrics cited in the research note indicate Klaviyo appears undervalued relative to its Fair Value assessment. The stock was also trading close to its 52-week low of $18.55, according to the same dataset.
Stephens attributed the change in the price objective to a valuation reset that applies a 5.0x EV/FY2 revenue multiple. The firm highlighted that this adjustment in multiple underlies the lower target even as several operational and financial indicators for Klaviyo remain constructive.
On fundamentals, Stephens noted Klaviyo's 75.15% gross profit margin and a balance sheet that shows more cash than debt, calling attention to the company's relatively healthy profitability profile and liquidity position.
The company posted a sequentially re-accelerating revenue performance in the fourth quarter of 2025, with revenue growth of 29.6%. Management also delivered a 100 basis point sequential improvement in net revenue retention (NRR) for the quarter.
For fiscal year 2026, Klaviyo boosted its revenue growth guidance slightly, moving the midpoint from 21.5% to 22.0%. The firm also reported growing adoption of AI tools by its customer base: more than half of campaigns for customers who have adopted AI are now AI-generated, signaling expanding use of the technology within Klaviyo's product set.
While praising those trends, Stephens observed that Klaviyo has not yet provided clear, quantitative metrics on AI monetization. The analyst expressed optimism that management will supply more definitive data on how AI converts into revenue, given the encouraging usage patterns reported.
Recent quarter results further underline the company's operational momentum. Klaviyo recorded fourth-quarter 2025 earnings per share of $0.19, topping the consensus expectation of $0.15, a 26.67% positive surprise. Quarterly revenue came in at $350.2 million versus a forecast of $320.74 million, representing a 9.19% beat.
Those earnings and revenue beats were characterized as evidence of solid execution in the quarter. The company’s announcement prompted a favorable reaction in the market, though Stephens' note and the available data focused on the underlying business metrics rather than on intraday price swings.
In sum, the analyst decision to lower the price target reflects an updated valuation multiple applied to Klaviyo's forward revenue, even as multiple operational indicators - margin, cash position, revenue growth, improved NRR, raised guidance, and accelerating AI campaign utilization - paint a picture of ongoing business strength. Observers will likely watch for further detail from management on AI monetization and for any subsequent updates to the firm's valuation framework.
Summary
Stephens trimmed its Klaviyo price target to $31 from $43 while keeping an Overweight rating, citing a valuation reset tied to a 5.0x EV/FY2 revenue multiple. This adjustment comes amid strong fourth-quarter 2025 results, improved net revenue retention, higher FY2026 revenue growth guidance, and more than 50% of campaigns being AI-generated for adopting customers. InvestingPro data suggests the stock trades below fair value and near its 52-week low.