William Blair analyst Jason Ader has maintained their bullish stance on BLZE stock, giving a Buy rating on September 19.
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Jason Ader has given his Buy rating due to a combination of factors that highlight Backblaze’s potential for growth and profitability. The company’s competitive edge is evident in its cost-effective and efficient storage solutions, which stand out against larger hyperscaler and neo-cloud offerings. This differentiation is crucial as the cloud storage market experiences growth driven by AI advancements.
Additionally, Backblaze’s B2 Cloud segment is showing signs of growth reacceleration, particularly with AI customers, and is expected to achieve over 30% growth by the end of fiscal 2025. The company’s strategic changes in its go-to-market approach, including the establishment of direct sales teams and a focus on upskilling, are already yielding positive results. Furthermore, the secular trends in AI and data are increasing the demand for scalable storage solutions, which positions Backblaze favorably. Management’s focus on improving profitability through margin expansion and free cash flow generation further supports the positive outlook, despite acknowledging that growth reacceleration is still in progress.