BlackLine’s Strong Performance and Future Potential Justify Buy Rating

Morgan Stanley analyst Chris Quintero has maintained their bullish stance on BL stock, giving a Buy rating yesterday.

Chris Quintero has given his Buy rating due to a combination of factors that highlight BlackLine’s strong performance and future potential. The company reported a stabilizing growth rate in the first quarter, with constant currency Annual Recurring Revenue (ARR) growing 8% year-over-year, surpassing expectations. This growth was supported by improved go-to-market execution, increased average deal sizes, and faster implementation processes, which led to a 20% increase in Go Live volume.
Furthermore, BlackLine’s new pricing model and SAP SolEx exceeded expectations, contributing to the company’s outperformance. Despite a challenging macroeconomic environment, management has not observed any significant negative impacts, which they attribute to better communication of BlackLine’s value proposition. Additionally, the company’s operating margin significantly exceeded estimates, and free cash flow projections have been revised upwards, reinforcing the Buy rating as BlackLine’s growth recovery and margin potential remain undervalued.

Quintero covers the Technology sector, focusing on stocks such as BlackLine, Vertex, and Onestream, Inc. Class A. According to TipRanks, Quintero has an average return of 14.7% and a 60.00% success rate on recommended stocks.

In another report released yesterday, Bank of America Securities also reiterated a Buy rating on the stock with a $66.00 price target.