UPDATE: Goldman Sachs Upgrades BlackLine (BL) to Neutral
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Goldman Sachs analyst Christopher Merwon upgraded BlackLine (NASDAQ: BL) from Sell to Neutral with a price target of $137.00 (from $80.00).
The analyst comments "Blackline’s business continued its recovery F4Q as revenue came in 4% ahead of our estimate and billings growth accelerated for the second consecutive quarter to 23%, up from 19% last quarter and 10% in 2Q20. As CFOs began to refocus on financial back-office transformations, Blackline saw an improvement in demand, aided by partner-influenced deals and Solex. Rimilia, a recently-acquired AR automation tool, is exceeding initial expectations and should contribute materially to top-line growth in 2022. We have been Sell rated on BL given concerns about the competitive environment and market saturation. However, it appears that would-be entrants into the core financial close space have not had an impact on BL’s business, and with the addition of Rimilia, we believe Blackline has effectively grown their TAM to over $28bn, leaving plenty of runway for growth. As billings accelerate in an improving demand environment, we are upgrading shares of BL to Neutral from Sell. Our updated price target of $137, now based on 16x SNTM sales &
DCF, is more in line with 20-30% top-line growth peers. We are encouraged by the steady execution, and as a result, our price target goes to $137 from $80."
Shares of BlackLine closed at $133.47 yesterday.
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