What happens to stocks if AI loses momentum?
On Wednesday, JMP Securities analyst at Citizens reiterated a Market Outperform rating with an $80.00 price target for BlackLine shares (NASDAQ:BL), following the company’s release of first-quarter financial results. BlackLine’s non-GAAP earnings per share (EPS) for Q1 2025 came in at $0.49, surpassing the consensus estimate of $0.38. The company’s operating margins also exceeded expectations, reaching 20.9% against the predicted 17.2%, with a slight boost from foreign exchange (FX) benefits. According to InvestingPro data, BlackLine maintains a healthy gross margin of 75.2% and trades at an attractive PEG ratio of 0.24, suggesting potential value relative to its growth rate.
The company’s revenue for the quarter was $166.9 million, a 6% increase year-on-year (y/y) and slightly above the consensus of $166.7 million. This growth rate, however, represented a slowdown from the 9% increase reported in the previous quarter. Subscription revenue, a key metric for the software company, was $158.5 million, up 6% y/y but slightly below the consensus forecast of $159.0 million. InvestingPro analysis indicates the company maintains strong financial health with a current ratio of 2.59, while operating with a moderate level of debt. For deeper insights into BlackLine’s financials and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
BlackLine’s calculated remaining performance obligations (cRPO) grew by 7%, which is an improvement from the 5% growth seen last quarter but still below the 10% growth estimated by Citizens. Billings for the quarter stood at $159 million, marking a 9% y/y increase, inclusive of a slight FX headwind. This figure also represents an improvement from the 5% growth rate seen in the previous quarter.
Despite these mixed results, BlackLine shares saw a 1% increase in aftermarket trading on Wednesday. This movement came after the stock had experienced a significant 23% decline year-to-date, which contrasts with a 5% decrease in the Russell 3000 index. The company’s performance in key financial metrics, including EPS and operating margins, appears to have contributed to the positive aftermarket response.
In other recent news, BlackLine Inc. reported its first-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.58, compared to the forecasted $0.38. The company’s revenue reached $167 million, slightly below the anticipated $167.33 million, marking a 6% year-over-year growth. Despite the revenue miss, BlackLine’s stock experienced a notable 6.62% increase in aftermarket trading. The company maintains a strong cash position with $866 million in cash and equivalents, highlighting its financial stability. BlackLine’s Annual Recurring Revenue (ARR) rose to $656 million, marking an 8% increase, reflecting its strategic focus on digital finance transformation. Additionally, the company provided full-year revenue guidance of $692-$705 million, representing 6-8% growth. BlackLine’s non-GAAP operating margin guidance was raised to 21.5-22.5%, demonstrating confidence in its operational efficiency. These developments indicate BlackLine’s continued emphasis on growth in subscription and services revenue, aligning with broader market trends.
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