Blackline Safety wins price target raise at Ventum

Following the company’s third quarter results, Ventum Capital Markets analyst Amr Ezzat has raised his price target on Blackline Safety (Blackline Safety Stock Quote, Chart, News, Analysts, Financials TSX:BLN).

On September 11, BLN reported its Q3, 2024 results. The company posted Adjusted EBITDA of $800,000 on revenue of $33.7-million, a topline that was up 36% year-over-year.

“We have achieved topline growth in every quarter since we launched the G7, CEO Cody Slater said. “The $33.7 million reported this quarter is actually more revenue than we generated in the entire fiscal 2019, demonstrating the strong market acceptance of our connected worker solutions. Topline growth has been the story all along for Blackline but achieving positive EBITDA demonstrates that the Company is now truly reaching scale, and we have barely scratched the surface of what we can accomplish.”

The analyst summarized the results.

“Blackline Safety delivered an outstanding Q3/F24, surpassing expectations across the board,” he wrote. “Most notably, the Company reported an unexpected positive Adjusted EBITDA of $0.8M, significantly ahead of both the Street’s forecast of -$0.8M and our expectation of -$1.4M. This marks a substantial turnaround from the previous quarter’s -$2.0M and last year’s -$3.8M. The earlier-than-anticipated profitability sets a strong foundation heading into the seasonally stronger Q4, positioning Blackline for continued momentum. Revenue grew 35.7% YoY to $33.7M (versus Street expectations of $31.9M), driven by robust hardware sales and a notable 34.1% YoY growth in recurring service revenues, with consolidated gross margins expanding to 59.0%. With Annual Recurring Revenue (ARR) reaching a record $62.1M (32.1% YoY) and a strong Net Dollar Retention (NDR) rate of 128%, Blackline is effectively scaling its high-margin, high-visibility service business while maintaining strong retention and upsell performance. Given this strengthening profitability and accelerating momentum, our outlook remains highly positive. Looking ahead to Q4, Blackline is set to launch the EXO 8, a next-generation portable area direct-to-cloud monitor capable of detecting up to eight gases and gamma radiation, aimed at industrial organizations.”

In a research update to clients September 11, Ezzat maintained his “Buy” rating but raised his price target on BLN from $6.50 to $7.00, implying a return of 39.2% at the time of publication.

The analyst thinks the company will post Adjusted EBITDA of negative $3.6-million on revenue of $129.0-million in fiscal 2024. He expects those numbers will improve to Adjusted EBITDA of positive $7.5-million on a topline of $158.8-million in fiscal 2025.