BL - BlackLine: Stay Away Profit Expansion Expected To Be Meager This Year

2024-04-29 12:55:36 ET

Summary

• BlackLine's stock performance has been flat this year and is expected to decline further due to pessimism surrounding its Q1 earnings release.
• BlackLine's revenue growth is decelerating, and its margin guidance for FY24 is significantly lower than the gains seen in FY23.
• It's still facing a difficult macro environment that has many smaller customers churning.
• Trading at a >28x P/E ratio despite little growth, BlackLine is overvalued.

This is something I can't emphasize enough: 2024 is a stock picker's market. Though the market overall has vacillated between big one-day gains and losses over the past few weeks, careful portfolio consideration is still the key to beating the markets - and in particular, we need to be careful with positions that have seen souring fundamental stories and are better converted to simple cash (which, after all, is still earning hefty interest with the Fed's slower pace of rate increases)....

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