Here's a modern shopping dilemma: you find the perfect outfit online, but your budget says "not today." For H&M shoppers in Romania and Hungary, that problem just got a little easier. Klarna Group plc (KLAR) announced Monday that it's expanding its partnership with the global fashion retailer into those two markets, letting customers split their payments into manageable, interest-free chunks.

Think of it as bringing the "buy now, pay later" model to your online shopping cart. At checkout, customers can choose to pay immediately, within 30 days, or in three equal installments—all with no interest if paid on time. The goal is simple: make paying for that new wardrobe as frictionless as picking it out.

Why Romania and Hungary Matter

This isn't just another market entry for Klarna. The company has been growing steadily in Romania since its launch there in June 2023, already racking up over 500,000 active users and partnering with more than 1,500 local merchants. Expanding the H&M deal is a logical next step in a market that's already embracing its services.

"We are delighted to expand our partnership with H&M and bring Romanian and Hungarian consumers modern, digital, transparent alternatives for managing their payments," said Loredana Pipoș-Lupescu, Country Manager Romania at Klarna.

From H&M's perspective, it's about meeting customers where they are. "By extending our partnership with Klarna, we're providing to customers in Romania and Hungary a truly modern way to shop, with flexible payment solutions," added Katarzyna Skrzeczynska, Head of Customer Activation and Marketing for H&M Region East Europe.

The Bigger Picture: A Million Merchants and Counting

While this expansion is specific to two countries, it fits into Klarna's much larger global story. The company recently hit a significant milestone: surpassing 1 million retail partners worldwide. That's a 47% year-over-year increase, with 285,000 new merchants added just in 2025. Particularly strong growth came from leisure and fitness categories—apparently people want to finance their gym memberships and vacation gear as much as their fashion.

The scale is almost hard to comprehend: over 118 million consumers, operations in 45 markets, and more than 3.4 million transactions processed every single day. Klarna isn't just a payment option; it's becoming part of the global retail infrastructure.

The Stock Market Paradox

Here's where things get interesting. Despite these impressive business metrics, Klarna's stock has been having a rough time. Shares are down about 72% over the past year and currently trade closer to their 52-week low of $12.50 than their high of $57.20. At Monday's close, they were up 2.62% at $12.94.

From a technical analysis perspective, the picture is mixed. The stock is trading below both its 20-day and 100-day simple moving averages, which typically suggests a downward trend. However, the MACD indicator shows a bullish configuration, suggesting that downside pressure might be easing. The Relative Strength Index (RSI) sits at 33.46—not quite in oversold territory, but getting there.

Traders are watching key levels: $12.50 as support and $14.00 as the first major resistance level to break through.

What the Analysts Think

Wall Street hasn't given up on Klarna, despite the stock's performance. The average analyst price target sits at $40.27, with a Buy rating consensus. That's a significant premium to the current price, suggesting analysts see substantial upside potential.

However, it's worth noting that several major firms recently lowered their targets while maintaining positive ratings:

• JP Morgan (JPM): Overweight rating, lowered target to $20.00 (Feb. 20)
• UBS Group AG (UBS): Buy rating, lowered target to $20.00 (Feb. 20)
• Wells Fargo & Company (WFC): Overweight rating, lowered target to $32.00 (Feb. 20)

The message seems to be: the long-term story is intact, but we're adjusting for near-term challenges.

The Bottom Line

Klarna's expansion with H&M into Romania and Hungary is a small piece of a much larger puzzle. It shows the company continuing to execute on its core strategy: making flexible payments available wherever people shop. The business fundamentals—growing merchant base, expanding user count, increasing transaction volume—all look strong.

Yet the stock market is telling a different story, at least for now. It's a classic disconnect between operational success and market sentiment. For investors, the question is whether Klarna's global growth story will eventually translate into stock price appreciation, or if the challenges in the buy-now-pay-later sector will continue to weigh on valuation.

For shoppers in Romania and Hungary, though, the calculation is simpler: they now have more ways to pay for that new H&M outfit. And sometimes, that's what really matters.