Klaviyo, Inc. (NYSE: KVYO)

Sector: Technology Industry: Software - Infrastructure CIK: 0001835830
Market Cap 5.13 Bn
P/B 4.29
P/E -161.55
P/S 4.16
ROIC (Qtr) -4.79
Div Yield % 0.00
Rev 1y % (Qtr) 29.62
Total Debt (Qtr) 120.75 Mn
Debt/Equity (Qtr) 0.10
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About

Klaviyo, Inc. (KVYO) operates in the marketing automation industry, a sector that is thriving due to the increasing significance of data-driven decision making and personalized customer experiences. The company, established in 2012 and headquartered in Boston, Massachusetts, provides businesses with a software-as-a-service (SaaS) platform that empowers them to collect, store, and analyze customer data. This data is then utilized to create targeted marketing campaigns and customized customer experiences. Klaviyo's platform is renowned for its scalability...

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Investment thesis

Bull case

  • Strong operating cash flow of 218.01M provides robust 1.81x coverage of total debt 120.75M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 1.07B provide 43.04x coverage of short-term debt 24.76M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 1.58B provides 13.09x coverage of total debt 120.75M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 189.54M exceeds capital expenditure of 28.46M by 6.66x, indicating strong organic growth funding capability.
  • Tangible assets of 1.58B provide exceptional 15.31x coverage of deferred revenue 103.25M, showing strong service capability backing.

Bear case

  • Operating cash flow of 218.01M barely covers its investment activities of (30.50M), with a coverage ratio of -7.15, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (30.50M) provide weak support for R&D spending of 291.21M, which is -0.10x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 1.07B provide limited coverage of acquisition spending of (2.03M), which is -524.67x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 218.01M shows concerning coverage of stock compensation expenses of 162.03M, with a 1.35 ratio indicating potential earnings quality issues.
  • Operating earnings of (30.52M) show weak coverage of depreciation charges of 43.35M, with a -0.70 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 2,948.93 Bn 24.73 9.65 57.61 Bn
2 ORCL Oracle Corp 734.55 Bn 67.24 19.76 124.39 Bn
3 PLTR Palantir Technologies Inc. 313.28 Bn 192.78 70.00 0.23 Bn
4 PANW Palo Alto Networks Inc 109.38 Bn 97.90 11.45 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 102.48 Bn -326.20 22.45 0.82 Bn
6 SNPS Synopsys Inc 69.14 Bn 51.90 9.80 14.29 Bn
7 NET Cloudflare, Inc. 66.52 Bn -645.60 33.04 3.50 Bn
8 FTNT Fortinet, Inc. 62.73 Bn 33.48 9.57 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.70 2.10
EV to Cash from Ops. EV/CFO 19.56 3.92
EV to Debt EV to Debt 35.32 -2.43
EV to EBIT EV/EBIT -139.76 11.57
EV to EBITDA EV/EBITDA -174.76 18.19
EV to Free Cash Flow [EV/FCF] EV/FCF 22.50 19.98
EV to Market Cap EV to Market Cap 0.83 1.27
EV to Revenue EV/Rev 3.46 29.29
Price to Book Value [P/B] P/B 4.29 4.97
Price to Earnings [P/E] P/E -161.55 -12.45
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.21
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.73
Dividend per Basic Share Div per Share (Qtr) 0.00 0.11
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.67
Interest Coverage Interest Coverage 0.00 -16.04
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -65.24 -403.22
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 20.84 223.80
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 31.15 585.97
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 54.53 5.89
EBIT Growth (1y) % EBIT 1y % (Qtr) 30.13 27.96
EBT Growth (1y) % EBT 1y % (Qtr) 30.13 20.61
EPS Growth (1y) % EPS 1y % (Qtr) 35.29 144.77
FCF Growth (1y) % FCF 1y % (Qtr) 27.44 50.30
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 28.67 45.98
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.78 0.65
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 3.78 1.23
Current Ratio Curr Ratio (Qtr) 4.27 2.63
Debt to Equity Ratio Debt/Equity (Qtr) 0.10 0.73
Interest Cover Ratio Interest Cover Ratio 0.00 -16.04
Times Interest Earned Times Interest Earned 0.00 -16.04
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 1.00 -549.97
EBIT Margin % EBIT Margin % (Qtr) -2.47 -240.33
EBT Margin % EBT Margin % (Qtr) -2.47 -608.68
Gross Margin % Gross Margin % (Qtr) 74.70 51.14
Net Profit Margin % Net Margin % (Qtr) -2.60 -611.28