Klaviyo (KVYO) Plunge 4.65% to 2025 Lows as Valuation Doubts, CEO Stake Sale Weigh on AI-Driven Growth Strategy

Klaviyo (KVYO) fell 4.65% on Thursday, marking its second consecutive day of declines, with the stock dropping 6.54% over the past two sessions. The share price touched its lowest level since April 2025, with an intraday slump of 5.39%, as investors grapple with valuation concerns and strategic uncertainties.

Investor skepticism has intensified amid Klaviyo’s elevated price-to-sales (P/S) ratio of 8.1x, significantly above the industry average of 4.4x. Analysts and shareholders are questioning whether the company’s aggressive reinvestment in AI-driven marketing tools and R&D can justify its premium valuation, particularly as margins face downward pressure from scaling operations and innovation costs. The recent CEO’s sale of a $7.5 million stake further fueled doubts, with insider selling often interpreted as a signal of reduced confidence in near-term performance.

Despite launching AI-powered solutions like the Marketing Agent and Customer Agent to strengthen its position in the B2C automation sector, the focus on growth over profitability has drawn scrutiny. While these tools aim to enhance customer engagement and operational efficiency, investors remain wary of the trade-off between short-term margin compression and long-term market leadership. Divergent analyst opinions have added to the volatility, with Morgan Stanley upgrading the stock to “Buy” and Baird cutting its price target to $39, reflecting a broader debate over whether Klaviyo’s valuation is aligned with its execution risks and margin resilience.

Macroeconomic headwinds, including inflationary pressures and tighter credit conditions, have heightened demands for clearer capital efficiency. The company’s ability to balance AI innovation with financial discipline will be critical in restoring investor confidence. As Klaviyo navigates a competitive landscape with rivals like Adobe and Salesforce, its path to profitability—without compromising growth—will remain under close scrutiny, shaping its trajectory in the high-growth tech sector.