Stock Market Today, Feb. 19: Klarna Group Shares Plunge After Q4 Results Miss Forecasts

Klarna Group (NYSE:KLAR), a digital bank and flexible payments provider, closed Thursday at $13.84, down 26.95%. The stock dropped after Q4 results missed forecasts and guidance pointed to slower near‑term growth with higher credit provisions. Investors are watching to see whether margins can improve as the company matures. Trading volume reached 44.6 million shares, about 1,159% above its three-month average of 3.5 million shares. Klarna Group IPO'd in 2025 and has fallen 70% since going public.

How the markets moved today

The S&P 500 slipped 0.29% to 6,862, while the Nasdaq Composite declined 0.31% to 22,683. Industry peer Affirm closed at $51.82, up 0.23%, underscoring diverging reactions to recent funding and growth narratives across the space.

What this means for investors

Down roughly 70% in just six months since its IPO, buy-now-pay-later upstart Klarna is a prime example of why investors may want to give newly public stocks a few quarters to prove themselves before buying. While Klarna grew revenue, merchants, and active users by 38%, 42%, and 28%, respectively, during the quarter, it fell short of estimates.

Making matters worse, Klarna’s provision for credit losses jumped 59% from last year, which, paired with disappointing guidance, had the stock tumbling today. That said, Klarna’s banking operations (which launched debit cards and bank accounts in the U.S. last year) doubled its active consumer count to 15.8 million. Now trading at a more reasonable 1.6 times sales, Klarna will be worth watching going forward, but should only be considered by risk-tolerant investors.

Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Klarna Group. The Motley Fool has a disclosure policy.