Blackline Stock Fair Value – Piper Sandler Downgrades BlackLine to ‘Underweight’
January 4, 2024
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BLACKLINE ($NASDAQ:BL): Piper Sandler has recently downgraded BlackLine, a leading provider of cloud-based solutions for Finance & Accounting (F&A) automation, to “Underweight”. BlackLine empowers organizations to modernize their financial close, reduce manual effort and errors, and gain visibility into their financial operations. This is likely due to the negative implications it could have on its future performance and earnings.
In addition, Piper Sandler cited potential risks of increased competition, pressure on pricing, and the potential for a shift in focus towards other areas of business as contributing factors to the downgrade. Despite this, BlackLine remains a leader in the F&A automation industry and is expected to remain competitive in the long run. It continues to invest in developing new technologies and expanding its customer base. With a strong track record of creating innovative products and services, BlackLine is well-positioned to capitalize on the growth of the F&A market.
Share Price
On Wednesday, Piper Sandler downgraded their rating of BlackLine stock to ‘Underweight’. The stock opened at $58.4 and closed the day at $56.4, representing a 4.4% decrease from the day prior where it had closed at $59.0. This downgrade caused a significant dip in the stock’s price, with the stock taking a hit of nearly $3. According to Piper Sandler, they felt the stock was overvalued and that investors should be cautious due to the risks associated with the company’s outlook. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Blackline. More…
| Total Revenues | Net Income | Net Margin |
| 574.22 | 42.07 | 9.2% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Blackline. More…
| Operations | Investing | Financing |
| 110.2 | -75.42 | 11.03 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Blackline. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 2.02k | 1.77k | 3.54 |
Key Ratios Snapshot
Some of the financial key ratios for Blackline are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 19.5% | – | 8.7% |
| FCF Margin | ROE | ROA |
| 14.6% | 16.0% | 1.6% |
Analysis – Blackline Stock Fair Value
At GoodWhale, we have conducted an in-depth analysis of BLACKLINE’s financials. Through our proprietary Valuation Line, we have determined that the intrinsic value of a BLACKLINE share is approximately $99.9. Currently, BLACKLINE stock is traded at $56.4 – substantially lower than its intrinsic value. This translates to an undervaluation of 43.5%, presenting an attractive opportunity for potential investors. BlackLine_to_Underweight”>More…
Peers
The company offers a suite of solutions that automate and streamline accounting processes, including the financial close, account reconciliation, journal entry, and intercompany accounting. BlackLine‘s competitors include MCAP Inc, Shenzhen InfoTech Technologies Co Ltd, and APT Systems Inc.
– MCAP Inc ($OTCPK:MCAP)
MCAP Inc is a holding company that operates in the real estate industry. The company has a market capitalization of 112.86 thousand as of 2022 and a return on equity of -106.38%. MCAP Inc is engaged in the business of acquiring, holding, developing, and managing real estate properties. The company’s portfolio includes residential, commercial, and industrial properties.
– Shenzhen InfoTech Technologies Co Ltd ($SZSE:300085)
Shenzhen InfoTech Technologies Co Ltd is a Chinese technology company that specializes in the development and manufacturing of mobile phones and other electronic devices. The company has a market cap of 6.66B as of 2022 and a Return on Equity of -19.32%. Shenzhen InfoTech Technologies Co Ltd is a publicly traded company listed on the Shenzhen Stock Exchange.
– APT Systems Inc ($OTCPK:APTY)
APT Systems Inc is a publicly traded company with a market capitalization of 1.75 million as of 2022. The company has a return on equity of 50.12%. APT Systems Inc is a provider of software and services for the financial markets industry. The company’s products and services include trading platforms, market data and analysis tools, and order management systems.
Summary
BlackLine is a publicly traded company that provides cloud-based accounting and finance automation software. Recently, Piper Sandler downgraded the stock to “Underweight”, which caused the stock price to move down accordingly. Investors should consider the downgrade and proceed cautiously when considering an investment in BlackLine. Analysts suggest that the company faces increased competitive pressures in its core market and should remain aware of competitors’ technological advancements in the space.
Additionally, revenue growth has been slower than expected in recent quarters and the company has had difficulty meeting consensus earnings estimates. Investors should also watch for any changes in the pricing of the company’s products or services, as this could potentially signal a shift in business strategy or have an impact on revenues. In conclusion, BlackLine appears to be facing some headwinds at the moment but still offers potential for investors who are able to identify opportunities in the current turbulent market.
