BlackLine Safety Corp is undervalued, PI Financial says

Q1 results that beat the street consensus have PI Financial analyst David Kwan feeling bullish about Blackline Safety (Blackline Safety Stock Quote, Chart, News: TSXV:BLN).

On March 29, Blackline reported its Q1, 2018 results. The company lost $1.6-million on revenue of $3.8-million, a topline that was up 51 per cent over the same period a year prior.

“Blackline continues to see significant revenue growth based on the success in the field of our award-winning connected safety technology,” said Cody Slater, Blackline Safety’s chief executive officer and chairman. “No other vendor of wireless gas detection or lone worker systems offers a turnkey solution with 3G connectivity, voice calling, and plug-and-play cartridges as offered by our G7 product line.”

Kwan says this quarter is a sign of better things to come.

“BLN is off to a great start in the first two full quarters of availability of their market leading G7 platform,” the analyst says. “We expect to see an acceleration in sales momentum, as G7 gains greater exposure among customers and new product innovation expands BLN’s addressable market. The pipeline continues to rapidly grow, as BLN needs to add to its sales team to meet the strong demand. We see plenty of runaway ahead for BLN to execute on its high growth plans, as it grabs market share with its game changing G7 solution.”

In a research update to clients today, Kwan maintained his “Buy” rating and one-year price target of $7.75 on Blackline Safety Corp. implying a return of 38.4 per cent over Monday’s closing price of $5.60.

Kwan thinks Blackline will generate Adjusted EBITDA of negative $5.0-million on revenue of $18.8-million in fiscal 2018. He expects those numbers will improve to EBITDA of positive $1.9-million on a topline of $31.9-million the following year.