Klarna, a buy now, pay later provider, is going public with an offer price of USD 40 per share. However, our fair value estimate is USD 45 per share, reflecting a 12.5% upside potential. Klarna has established strong network effects and structural advantages, which we believe will lead to significant growth and profitability.

Recent agreements with payment service providers have expanded Klarna’s reach, positioning it for future growth. While the platform is currently breaking even, we anticipate profitability as it scales and improves underwriting models. Klarna’s competitive positioning and business model make it a strong player in the fintech industry with a narrow moat.

Investors should consider the potential of Klarna as it enters the New York Stock Exchange. With its strategic agreements and growth prospects, Klarna has the opportunity to become a profitable staple among fintech companies. Download Morningstar’s full IPO report on Klarna for more insights.

Read more at Morningstar: Klarna’s IPO Should Provide a Great Opportunity for Investors