BLN stock upgraded to “Buy” at Beacon

Following the company’s Q4 results, Beacon Securities analyst Gabriel Leung has upgraded Blackline Safety Corp (Blackline Safety Corp Stock Quote, Chart, News, Analysts, Financials TSX:BLN).

On BLN reported its fourth quarter 2023 results. The company posted an Adjusted EBITDA loss pf $1.83-million on revenue of $30.1-million, a topline that was up 36 per cent over the same period a year prior.

“We are delighted to achieve a significant milestone, reaching $100-million in total annual revenue as we recorded our 27th consecutive quarter of year-over-year total revenue growth,” CEO Cody Slater said. “This includes our fourth quarter, where we reached $30-million in total revenue, a 36-per-cent increase over the prior year’s quarter. We are proud of our execution during the year: increasing ARR 40 per cent to $51.1-million, achieving 33 per cent more in hardware revenue, while decreasing total annual expenses 10 per cent, leading to a dramatic reduction in EBITDA loss.”

Leung gave his take on the quarter and explained the reasoning behind his price target raise and ratings upgrade.

“Overall, the demand environment remains positive and BLN expects growth to continue to benefit from new product releases and product upgrades. When combined with prudent cost management and gross margin improvements, we believe this should translate into continued margin / FCF expansion over our forecast period. We are increasing our target to $5.50 (was $4.50), which is based on 2.5x FY25e EV/Sales due largely to the passage of time.

Leung thinks BLN will post EBITDA of $1.0-million on revenue of $126.6-million in fiscal 2024. He expects those numbers will improve to EBITDA of $10.7-million on a topline of $158.2-million in fiscal 2025.