Klarna (NYSE: KLAR) chief executive Sebastian Siemiatkowski says a key strength of the fintech remains “not very well understood” and, therefore, underappreciated by the market.
His remarks arrive on the heels of KLAR earnings, which showed continued revenue growth, but a swing to a net loss of $95 million – down from $12 million of “net income” in the same quarter last year.
Consequently, Klarna’s stock tanked as much as 10% on Tuesday morning.
Hidden strength that could drive Klarna stock higher
Speaking with CNBC today, CEO Sebastian Siemiatkowski argued the company’s ability to rapidly adjust its underwriting and refresh its balance sheet remains underappreciated by the market.
Unlike traditional banks burdened by long-term credit products like mortgages and revolving credit cards, Klarna’s average outstanding balance is just $100, with a lifecycle of 40 to 60 days.
“If there is an economic downturn, we can quickly adjust our underwriting and we can refresh our balance sheet in one or two months,” he explained.
This agility allows Klarna to respond to macroeconomic shifts faster than legacy institutions that may take years to cycle through outdated credit exposures.
Over time, this strength could unlock further upside in KLAR shares.
US card success to unlock further upside in KLAR shares
Klarna shares are worth buying on the post-earnings dip due to the success of its US card product as well.
According to Siemiatkowski, Klarna Card has become “the most successful new card launch by a bank in US history,” citing rapid adoption and strong user engagement.
Klarna Card has secured 4 million sign-ups since its launch in July. It blends the flexibility of buy-now-pay-later (BNPL) with traditional credit features – appealing to younger consumers wary of revolving debt.
Klarna’s ability to scale the product in a competitive market like the US speaks to its brand strength and product-market fit.
The card’s performance – Siemiatkowski added – has exceeded internal expectations, and it’s now a key pillar of the financial technology company’s US growth strategy.
Klarna is not an expensive fintech stock to own
Despite the pullback, there are several positives that justify owning KLAR stock for 2026.
For starters, the fintech continues to expand its global footprint, with recent partnerships in Latin America and Southeast Asia.
More importantly, Klarna’s management argues that underlying operational efficiency did improve significantly, and the wider loss is due to accounting timing related to their rapid growth.
Siemiatkowski pointed to the company’s artificial intelligence (AI) driven customer service tools and merchant analytics as differentiators that are gaining traction as well.
Valuation-wise, Klarna stock trades at a price-to-sales (P/S) multiple of less than 5 – a discount to peers like Affirm and Block, despite comparable or better growth metrics.
For investors willing to look beyond near-term volatility, the combination of underwriting strength, product innovation, and global scale could make Klarna a compelling long-term bet.
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