DA Davidson lifts BlackLine stock target to $56, maintains Buy

On Wednesday, DA Davidson analyst William Jellison adjusted the price target for BlackLine (NASDAQ:BL) stock, raising it to $56 from the previous $55, while sustaining a Buy rating on the shares. According to InvestingPro data, analyst targets for BlackLine range from $40 to $80, with the stock currently trading at $46.65 and showing signs of undervaluation based on InvestingPro’s Fair Value analysis. Jellison noted BlackLine’s strong performance in key areas during the first quarter of 2025, highlighting a 20% year-over-year increase in customer go-lives due to improvements in implementation processes. The company also saw a robust start in the adoption of its new pricing plan and secured several new clients through its Studio360 Platform.

Despite the absence of any adverse effects from tariff concerns on customer demand, BlackLine opted to lower the lower end of its 2025 revenue guidance by $5 million. Jellison estimated that, when accounting for constant currency, this adjustment translates to approximately a 1% decrease in the 2025 revenue guide midpoint. The company has maintained strong fundamentals with a robust gross margin of 75.23% and revenue growth of 10.74% over the last twelve months. Conversely, BlackLine increased its operating margin target for 2025 by 100 basis points, which, combined with the revenue forecast, indicates a 2% rise in the projected operating income for the same year.Discover more insights about BlackLine’s financial health and growth potential with InvestingPro, which offers 8 additional exclusive tips and comprehensive analysis through the Pro Research Report.

The company has garnered customer wins and continued industry recognition year-to-date, along with significantly enhanced partner activity. These achievements support the strength of BlackLine’s vision and its product execution capabilities, particularly for large global organizations. The company maintains a healthy financial position with liquid assets exceeding short-term obligations and a current ratio of 2.59. However, the company is experiencing churn among smaller clients, which are less aligned with its core competitive advantages. This churn is affecting the Net Revenue Retention (NRR) rate, which stands at 104%, remaining relatively flat quarter-over-quarter on a constant currency basis.

In other recent news, BlackLine Inc. reported its first-quarter 2025 financial results, showcasing a strong performance that exceeded analysts’ expectations. The company reported an earnings per share (EPS) of $0.58, significantly surpassing the forecasted $0.38. Revenue for the quarter was $167 million, a 6% increase year-over-year, although it slightly missed the anticipated $167.33 million. JMP Securities maintained a Market Outperform rating for BlackLine, with an $80 price target, emphasizing the company’s strong operating margins, which reached 21%, and effective cost management.

BlackLine’s subscription revenue grew by 6% year-over-year, contributing to the company’s annual recurring revenue (ARR) of $656 million, an 8% increase. The calculated remaining performance obligations (cRPO) rose by 7%, indicating ongoing contractual commitments. The company also reported a healthy operating cash flow of $47 million and a free cash flow of $33 million. BlackLine’s revenue renewal rate stood at 94%, with a net retention rate of 104%.

The company provided full-year revenue guidance of $692-$705 million, representing 6-8% growth, and raised its non-GAAP operating margin guidance to 21.5-22.5%. BlackLine’s strategic focus on digital finance transformation and AI-powered solutions continues to align with broader market trends, and the company remains cautiously optimistic about future market conditions.

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