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Friday - UBS has revised its price target for Blend Labs (NYSE:BLND) shares, lowering it to $3.50 from the previous $4.00, while maintaining a Neutral rating on the company. Currently trading at $3.19, Blend Labs maintains a strong financial position with more cash than debt on its balance sheet, according to InvestingPro data. The adjustment follows Blend Labs’ recent fourth-quarter earnings report and subsequent conference call. UBS analyst Karl Keirstead provided insights into the company’s performance and future prospects.
Keirstead highlighted the potential of KYMR’s oral immunology and inflammation (I&I) pipeline and degrader platform, noting the significance of the upcoming year for the company. Initial clinical data is expected for both STAT6 and TYK2, with healthy volunteer data for STAT6 due in June and Phase 1b atopic dermatitis (AD) data expected in the fourth quarter. TYK2 healthy volunteer data is also anticipated in the fourth quarter, and a new target is set to be disclosed in early May, involving a novel transcription factor that was previously considered undruggable.
The analyst expressed optimism about the company’s protein degradation technology, which has the potential to target previously undruggable conditions with oral treatments. He suggested that the STAT6 degrader could be an ’oral Dupi’ and that the TYK2 degrader could extend TYK2’s indications, possibly to include inflammatory bowel disease (IBD). The ongoing IRAK4 Phase 2b studies, in partnership with Sanofi (NASDAQ:SNY), are on track, with results expected in the first half of 2026 for hidradenitis suppurativa (HS) and mid-2026 for atopic dermatitis (AD).
During the conference call, the company provided details about the Phase 1b design for the STAT6 data for AD, which includes approximately 20 participants in a single-arm, open-label study over 28 days. The endpoints will focus on Th2 and other tissue biomarkers, as well as EASI and other clinical measures. Expectations for TYK2 healthy volunteer data were also affirmed for the fourth quarter. For deeper insights into Blend Labs’ financial health and growth prospects, including exclusive ProTips and comprehensive valuation metrics, visit InvestingPro, where you’ll find detailed analysis in our Pro Research Report.
In other recent news, Blend Labs Inc. reported a 15% year-over-year increase in total revenue for the fourth quarter of 2024, reaching $41.4 million, slightly surpassing the forecasted $41.38 million. The company also achieved non-GAAP operating profitability of $5.2 million, marking a significant milestone. Despite these positive financial results, Blend Labs’ stock faced a decline in aftermarket trading, reflecting ongoing investor concerns about challenges in the mortgage market and negative free cash flow, which improved but remained at -$7.2 million. Additionally, Blend Labs launched new AI-driven financial solutions, highlighting its strategic focus on innovation and efficiency.
The company anticipates positive free cash flow in the first quarter of 2025 and projects a 9% year-over-year growth in platform revenue. Blend Labs also increased its consumer banking compound annual growth rate (CAGR) target from 35% to 40%, demonstrating confidence in its growth trajectory. In other developments, Blend Labs signed new multiyear agreements with notable clients, including a top 10 U.S. bank and PHH Mortgage, further expanding its reach in the mortgage and home equity sectors. The company also formed a strategic partnership with TrueWork for income verification, which is expected to improve operational efficiency.
Analysts from William Blair and UBS showed interest in Blend Labs’ AI initiatives and consumer banking growth, with the company expressing optimism about these areas. Blend Labs’ ongoing efforts to streamline operations and focus on core strengths, such as its mortgage and consumer banking suites, are aimed at driving long-term value for customers and shareholders. Despite the challenges in the mortgage market, the company’s pipeline has grown by 50% year-over-year, indicating strong potential for future growth.
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