Klaviyo (KVYO) Shares Plunge 2.75% as Valuation Concerns, CEO Stake Sale Drive Selloff

Klaviyo (KVYO) shares tumbled 2.75% on Monday, hitting a fresh low since April 2025, with an intraday drop of 4.67%. The decline reflects a broader selloff in the stock, which has lost 26% over the past month despite a 14% annual gain, highlighting the tension between its strong historical growth and recent investor skepticism.

Analysts point to a combination of factors driving the volatility. Klaviyo’s elevated price-to-sales ratio of 8.1x, well above the 4.4x industry average, has raised questions about valuation sustainability. While the company’s AI-driven marketing tools and projected 22% annual revenue growth justify a premium for some, others worry that margin pressures and execution risks could undermine long-term potential. Recent strategic moves, including the launch of AI-powered Marketing Agent and Customer Agent, have reinforced its technological edge but also intensified scrutiny over profitability timelines.

Market sentiment was further shaken by the CEO’s $7.5 million stake sale, which triggered a 7.8% single-day drop. Insider selling often signals caution, particularly for high-growth stocks, and compounded concerns about management confidence. Mixed reactions to the company’s analyst day in late September added to the unease, with investors expressing doubts over margin expansion amid aggressive R&D investments. Analyst ratings have also diverged, with Morgan Stanley upgrading the stock to “Buy” while Baird cut its price target to $39, underscoring the divided outlook.

Despite these challenges, Klaviyo remains a focal point for investors weighing its growth trajectory against macroeconomic headwinds. The company’s ability to scale AI innovations, maintain revenue outperformance, and demonstrate margin resilience will be critical. For now, the stock’s trajectory reflects the broader struggle of high-growth tech firms to balance reinvestment with profitability in an environment favoring capital efficiency.