Hold Rating on BlackLine Amid Mixed Signals and Growth Concerns

BMO Capital analyst Daniel Jester has maintained their neutral stance on BL stock, giving a Hold rating today.

Daniel Jester has given his Hold rating due to a combination of factors affecting BlackLine’s stock performance. The company experienced a slower-than-expected end to FY24, with elongated deal cycles impacting vendors in the enterprise back office sector, alongside foreign exchange headwinds. While there are constructive efforts underway to boost growth, Jester remains cautious about the stock until there’s clearer evidence supporting the forward guidance which indicates potential growth acceleration.
Moreover, forward-looking growth indicators have not met expectations, with billing and remaining performance obligations growing less than anticipated. Although strategic products performed well, the SAP ecosystem did not meet expectations, raising concerns about spending priorities. The company’s revenue and margin figures have been influenced negatively by foreign exchange, and while total revenue showed a modest year-over-year growth, the necessary improvement in bookings for sustained growth is yet to be confirmed. Jester’s Hold rating reflects these mixed signals and the need for near-term catalysts before considering a more favorable outlook.