BlackLine's (NASDAQ:BL) growing losses don't faze investors as the stock increases 9.2% this past week
While BlackLine, Inc. (NASDAQ:BL) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 28% in the last quarter. But that doesn't change the fact that the returns over the last five years have been very strong. We think most investors would be happy with the 234% return, over that period. So while it's never fun to see a share price fall, it's important to look at a longer time horizon. The more important question is whether the stock is too cheap or too expensive today.
Since the stock has added US$454m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.
Check out our latest analysis for BlackLine
Given that BlackLine didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
For the last half decade, BlackLine can boast revenue growth at a rate of 23% per year. Even measured against other revenue-focussed companies, that's a good result. So it's not entirely surprising that the share price reflected this performance by increasing at a rate of 27% per year, in that time. This suggests the market has well and truly recognized the progress the business has made. BlackLine seems like a high growth stock - so growth investors might want to add it to their watchlist.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
BlackLine is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling BlackLine stock, you should check out this free report showing analyst consensus estimates for future profits.
A Different Perspective
While the broader market gained around 9.5% in the last year, BlackLine shareholders lost 34%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 27% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 3 warning signs for BlackLine that you should be aware of.
But note: BlackLine may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
