Klarna Group plc (KLAR) vs Synchrony Financial (SYF)

Klarna Group plc and Synchrony Financial are both Credit Services companies. Synchrony Financial is the larger, with a market value of $23.3B against $4.9B — 4.8× the size. Klarna Group plc has negative trailing earnings, so its P/E is not meaningful; Synchrony Financial trades at 7.4×. Klarna Group plc grew revenue faster over the last twelve months: 34.2% against 0.13%. Synchrony Financial has the higher net margin (14.8% vs −3.52%) and the higher return on invested capital (16.8% vs 0.00%). Across the 17 metrics below, Synchrony Financial leads on 14 and Klarna Group plc on 3.

Valuation

Metric KLAR SYF Credit Services median
P/E n/m 7.40 9.64
P/S 1.20 1.04 0.87
P/B 1.82 1.59 1.16
Price to free cash flow n/m 2.49 2.99
EV/EBITDA n/m n/m 9.58
EV/Sales (0.10) 1.05 2.32
Earnings yield (2.89%) 13.52% 6.72%
Free cash flow yield (78.64%) 40.12% 12.33%

Profitability

Metric KLAR SYF Credit Services median
Gross margin 58.18% 83.05% 77.13%
Operating margin (1.21%) 0.00% 0.34%
Net margin (3.52%) 14.82% 9.25%
Free cash flow margin (94.31%) 41.83% 13.03%
Return on equity (5.67%) 22.23% 8.49%
Return on assets (0.77%) 2.83% 2.29%
Return on invested capital 0.00% 16.83% 4.09%

Growth

Metric KLAR SYF Credit Services median
Revenue growth (TTM) 34.19% 0.13% 4.62%
EPS growth (last fiscal year) (8,000.00%) 8.54% —
Revenue growth, 5-year CAGR — 7.02% 9.13%
Net income growth, 5-year CAGR — 20.90% 0.00%

Health

Metric KLAR SYF Credit Services median
Debt to equity 0.00 0.97 0.68
Current ratio 1.08 1.22 1.55
Net debt to EBITDA 51.16 0.00 0.13

Dividend

Metric KLAR SYF Credit Services median
Dividend yield — 2.63% 3.34%
Payout ratio — 0.17 0.00

Size

Metric KLAR SYF Credit Services median
Market cap 4.86b 23.28b 872.19m

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