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Blend Labs (BLND)
NYSE:BLND
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Blend Labs
(NYSE:BLND)
Rating:57Neutral
Price Target:
$3.50
▼(-1.13%Downside)
Positive Factors
Customer Engagement
New logo wins strong in Q1, with the company closing 3x as many new deals in Q1 vs a year ago, including a top-25 credit union.
Financial Performance
Profitability is increasing even at the current tepid level of mortgage volume, and the banking suite continues to gain traction, providing an increasingly meaningful contribution to the P&L, which is mostly uncorrelated with mortgage.
New Business Development
Blend is gaining new logos at an accelerating pace, while expanding but at the same time simplifying its product offerings via expanding use of partnerships.
Negative Factors
Competitive Threats
Blend's largest customer is getting bought by an indirect competitor in the form of a non-bank lender who views technology as 'the bedrock of its investment strategy,' and thus competes with Blend's software.
Interest Rate Environment
The interest rate environment did take an unexpected turn to a bit 'higher for longer,' impacting mortgage-related revenue.
Revenue Forecast
Guidance was disappointing with expected Blend Platform revenue falling short of consensus estimates.
Blend Labs (BLND) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$915.17M
Dividend YieldN/A
Average Volume (3M)2.38M
Price to Earnings (P/E)―
Beta (1Y)1.70
Revenue Growth-0.40%
EPS Growth63.36%
CountryUS
Employees540
SectorTechnology
Sector Strength80
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.01
Shares Outstanding254,775,970
10 Day Avg. Volume2,241,632
30 Day Avg. Volume2,376,278
Financial Highlights & Ratios
PEG Ratio-0.49
Price to Book (P/B)-16.04
Price to Sales (P/S)0.00
P/FCF Ratio-39.20
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue1.37
Enterprise Value/Gross Profit9.52
Enterprise Value/Ebitda-3.19
Forecast
1Y Price Target
$5.31Price Target Upside50.00% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Blend Labs Business Overview & Revenue Model
Company DescriptionBlend Labs, Inc. provides cloud-based software platform solutions for financial services firms in the United States. It operates in two segments, Blend Platform and Title365. The company offers a suite of white-label products for mortgages, home equity loans and lines of credit, vehicle loans, personal loans, credit cards, and deposit accounts. It also provides a suite of mortgage products that facilitates homeownership journey for consumers comprising close, income verification for mortgage, homeowners insurance, and realty. In addition, the company offers title search procedures for title insurance policies, escrow, and other closing and settlement services, as well as other trustee services; and professional and consulting services. It serves banks, credit unions, financial technology companies, and non-bank mortgage lenders. Blend Labs, Inc. was incorporated in 2012 and is headquartered in San Francisco, California.
How the Company Makes MoneyBlend Labs generates revenue primarily through a software-as-a-service (SaaS) model, where financial institutions pay subscription fees to access and use its platform. Revenue streams include licensing fees based on transaction volume, which can vary depending on the number of applications processed through their system. Additionally, Blend may earn revenue from professional services such as implementation, customization, and ongoing support. Key partnerships with major banks and lenders help expand its market reach and drive adoption of its platform. Factors like the overall health of the mortgage and consumer lending markets, as well as the demand for digital transformation in financial services, significantly influence the company's earnings.
Blend Labs Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 7.60%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment overall, with significant achievements in transitioning to a software-focused model, substantial cash flow generation, strong sales momentum, and large customer deals. However, there are challenges related to macroeconomic volatility and a slight decrease in economic value per funded loan. Despite these challenges, the positive aspects significantly outweigh the negatives.Q1-2025 Updates
Positive Updates
Shift to a Software-First Model
Blend Labs is transitioning to a software-focused company by selling its title insurance business and forming strategic platform partnerships, which will drive higher profit margins and improve capital efficiency.
Record Free Cash Flow
Blend Labs achieved a record free cash flow of $15.5 million in Q1 2025, demonstrating strong financial performance even in a tough market.
Strong Sales Momentum
Blend Labs signed 11 new or expanded deals in Q1, nearly three times more than the same period last year, and secured 10 new or expansion deals early in Q2.
Large Financial Institution Deal
Blend Labs announced its largest deal ever, a $50 million renewal and expansion with a top financial institution, showcasing its ability to scale with customers.
Increase in Platform Revenue
Platform revenue grew 12% year over year, marking the third consecutive quarter of year-over-year growth, with Q1 platform revenue at $26.8 million, above the midpoint of guidance.
Expansion of Rapid Products
Blend Labs launched the Rapid Home Lending Suite, which includes refinance and home equity lending solutions, with early success evidenced by higher economic value per funded loan.
Positive Non-GAAP Operating Income
The company achieved a non-GAAP operating income of $1 million, representing a non-GAAP operating margin of 4%, at the high end of guidance.
Negative Updates
Economic Value Per Funded Loan Decrease
Economic value per funded loan decreased slightly to $93, just below the guidance of $94, with a forecasted trough of $88 expected in the near term.
Volatile Macro Environment
Q1 experienced volatility due to rate fluctuations, with uncertainty continuing into Q2 2025, affecting economic impacts from tariffs and potential benefits from banking deregulation.
Company Guidance
During the Blend Labs, Inc. First Quarter 2025 Earnings Call, guidance was provided for the second quarter and full year 2025. The company anticipates platform revenue for Q2 to be between $30.5 million and $32.5 million, projecting year-over-year growth of 10%. They expect Q2 platform non-GAAP operating income to range from $3.5 million to $5 million. The guidance also includes an estimate for platform non-GAAP operating expenses for the full year of 2025, which is projected to be between $85 million and $90 million. Furthermore, Blend Labs, Inc. aims to achieve the "rule of 40," defined as the sum of year-over-year platform revenue growth and non-GAAP operating margin by the end of 2025. The company also highlighted its strategic focus on simplifying operations by selling its Title 365 business, which is expected to enhance operating leverage and support growth initiatives.Blend Labs Financial Statement Overview
Summary
Blend Labs is navigating through significant financial challenges, particularly in achieving profitability and maintaining a stable financial position. The company has shown some marginal improvements in cash flow management, but persistent losses and negative equity pose substantial risks. Strategic restructuring and a focus on revenue growth are essential for future stability.Income Statement
Blend Labs has shown a decrease in total revenue over the years, with a significant drop from 2022 to 2023. The gross profit margin remains decent at around 55.7% for TTM (Trailing-Twelve-Months), but the company is struggling with negative EBIT and net income margins, indicating continued operating losses. The net profit margin for TTM is -34.8%, reflecting ongoing challenges in achieving profitability.45
Neutral
Balance Sheet
The balance sheet reflects a concerning financial position with negative stockholders' equity for the TTM period, highlighting financial instability. The debt-to-equity ratio is not applicable due to negative equity. With liabilities exceeding assets, the equity ratio is negative, posing a significant risk. The company's financial structure requires restructuring to support sustainability.40
Negative
Cash Flow
The cash flow statement shows some improvement in free cash flow, with the TTM free cash flow less negative compared to the previous year, indicating better cash management. However, the operating cash flow remains negative, and the free cash flow to net income ratio is less meaningful due to negative net income. The overall cash flow situation requires careful management to avoid liquidity issues.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 162.02M | 156.85M | 235.20M | 234.50M | 96.03M | Gross Profit |
| 90.54M | 81.14M | 89.65M | 115.99M | 61.74M | EBIT |
| -49.62M | -156.22M | -281.22M | -197.24M | -75.29M | EBITDA |
| -49.62M | -143.21M | -726.85M | -182.94M | -68.24M | Net Income Common Stockholders |
| -49.60M | -185.32M | -763.81M | -169.14M | -74.62M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 98.48M | 136.92M | 354.15M | 547.23M | 151.72M | Total Assets |
| 178.01M | 206.06M | 432.76M | 1.11B | 215.75M | Total Debt |
| 3.83M | 149.69M | 231.98M | 228.45M | 16.58M | Net Debt |
| -38.41M | 118.73M | 107.78M | 15.37M | -24.51M | Total Liabilities |
| 181.99M | 179.12M | 268.84M | 301.89M | 52.41M | Stockholders Equity |
| -56.36M | -19.24M | 123.17M | 774.64M | 163.34M |
| Cash Flow | Free Cash Flow | |||
| -22.89M | -128.21M | -192.49M | -129.39M | -66.33M | Operating Cash Flow |
| -13.04M | -127.62M | -190.42M | -127.50M | -65.01M | Investing Cash Flow |
| 45.40M | 127.31M | 99.43M | -633.91M | -7.92M | Financing Cash Flow |
| -21.06M | -90.96M | 2.22M | 933.57M | 90.76M |
Blend Labs Technical Analysis
Positive
3.54
Price Trends
3.40
Positive
3.52
Positive
3.81
Negative
Market Momentum
0.06
Positive
55.32
Neutral
36.99
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BLND, the sentiment is Positive. The current price of 3.54 is above the 20-day moving average (MA) of 3.47, above the 50-day MA of 3.40, and below the 200-day MA of 3.81, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 55.32 is Neutral, neither overbought nor oversold. The STOCH value of 36.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BLND.
Blend Labs Risk Analysis
Blend Labs disclosed 72 risk factors in its most recent earnings report. Blend Labs reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
The holders of our Series A Preferred Stock are entitled to vote on an as-converted to Class A common stock basis and have rights to approve certain actions. Additionally, Haveli may exercise influence over us through their ability to designate a member of our board of directors. Q4, 2024
2.
The issuance of shares of our Series A Preferred Stock reduces the relative voting power of holders of our Class A common stock, and the conversion of those shares into shares of our Class A common stock would dilute the ownership of Class A common stockholders and may adversely affect the market price of our Class A common stock. Q4, 2024
3.
Our Series A Preferred Stock has rights, preferences and privileges that are not held by, and are preferential to the rights of, our Class A common stockholders, which could adversely affect our liquidity and financial condition. Q4, 2024
Blend Labs Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
86 Outperform | $1.12B | 9.21 | 21.03% | ― | 6.40% | 9.72% | |
71 Outperform | $1.19B | 78.95 | 6.26% | ― | 7.71% | ― | |
71 Outperform | $799.32M | ― | -9.00% | ― | 9.30% | 24.96% | |
69 Neutral | $874.68M | 463.79 | 4.15% | ― | 30.64% | ― | |
68 Neutral | $1.07B | ― | -15.78% | ― | 6.26% | -9.54% | |
61 Neutral | $11.51B | 10.19 | -6.93% | 2.94% | 7.57% | -9.20% | |
57 Neutral | $915.17M | ― | -93.00% | ― | -0.40% | 63.36% |
* Technology Sector Average
Performance Comparison
BLND
Blend Labs
3.54
0.67
23.34%
FSLY
Fastly
7.31
-0.57
-7.23%
YALA
Yalla Group
7.08
2.29
47.81%
DSP
Viant Technology
13.96
4.46
46.95%
VTEX
VTEX
6.38
-0.39
-5.76%
RSKD
Riskified
4.97
-1.11
-18.26%
Blend Labs Corporate Events
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Blend Labs Reports Strong Q1 2025 Financial Results
Positive
May 8, 2025
On May 8, 2025, Blend Labs announced its first quarter 2025 financial results, highlighting a third consecutive quarter of year-over-year growth driven by increased customer engagement. The company reported a platform revenue of $26.8 million, exceeding expectations, and achieved a record first quarter signings with performance obligations up 70% year-over-year. Blend also generated positive free cash flow for the first time, marking a significant financial milestone. Additionally, Blend is in an exclusive process to potentially sell its title insurance business, aligning with its strategic shift to a software-first model.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.