Klaviyo Inc (KVYO) PT Raised to $38 at Goldman Sachs, 'Debate likely to shift from email changes to drivers of 2024 upside'
Goldman Sachs analyst Gabriela Borges raised the price target on Klaviyo Inc (NYSE: KVYO) to $38.00 (from $36.00) while maintaining a Buy rating.
The analyst comments "Klaviyo reported a solid 4Q23: revenue was 3% above the Street and EBIT margin was in-line (FactSet). 1Q revenue guidance is 1% above the Street, and 2024 revenue/EBIT guidance is 1%/8% above. In the last two weeks of December, Klaviyo saw customers being more cautious with spend and expects this behavior to continue into 2024. Key takeaways: 1) Klaviyo noted minimal disruption to date from the ongoing roll out of higher email marketing deliverability standards at Yahoo/Google. Specifically, the company saw unsubscribe rates increase by just 7/1000 of a percent. While visibility into spam rates is lower, as ISPs selectively share data, Klaviyo has yet to see an impact. We believe this detail helps counter the primary bear case on the stock from the past 3 months. 2) Upmarket traction was strong, Klaviyo added 259 customers spending >$50K annualized qoq — the largest ever quarterly jump — and now has ~2K customers in this cohort, up 80% yoy. We expect continued upmarket traction as Klaviyo shifts S&M resources to the mid-market and benefits from Shopify's Plus traction. 3) Klaviyo announced several new AI features and expects to eventually monetize AI. Customers see tangible value from Klaviyo AI, with one customer reporting a 25% reduction in unsubscribe rates in SMS with Klaviyo's subject line creation tool and another growing email revenue by 50% using predictive analytics. We expect that continued product innovation in AI will further differentiate Klaviyo from peers. We remain Buy rated and raise our PT to $38."