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Oppenheimer Takes Wait-And-See Approach To BlackLine

Priya Nigam

BlackLine Inc (NASDAQ: BL) reported first-quarter revenue and EPS ahead of expectations Thursday and raised its full-year guidance.

Billings continued to underwhelm in the quarter due to few new customer wins, decelerating domestic growth and declining SAP channel contributions, indicating that the company’s go-to-market strategies are still ramping, according to Oppenheimer.

This implies risk to estimates, the sell-side firm said Friday. 

The Analyst

Koji Ikeda maintained a Perform rating on BlackLine.

The Thesis

BlackLine reported first-quarter total revenue of $64.1 million, representing 25-percent year-on-year growth and beating the consensus estimate by about $800,000.

PF EPS came in at 2 cents, 3 cents higher than the consensus expectation, Ikeda said in the Friday note. (See his track record here.) 

The company announced second-quarter total revenue guidance of $67.4-$68.4 million, the midpoint of which is marginally higher than the consensus estimate of $67.6 million.

BlackLine guided to PF EPS of breakeven to 3 cents against a consensus projection of 2 cents.

View more earnings on BL

The company raised its 2019 total revenue and PF EPS guidance by $1 million to $276-$281 million and by 1 cent to 15-18 cents, respectively. The midpoint of both are marginally higher than the consensus expectations, the analyst said. 

While BlackLine recorded strong international sales in the first quarter; inked a record win in the Europe and Middle East region; witnessed good strategic product attach rates; and accelerated non-SAP revenue growth to 20 percent, billings were disappointing, Ikeda said. 

The company also indicated a potential rise in competition in the category, which could result in elongated sales cycles, according to Oppenheimer. 

Price Action

BlackLine shares were down 6.15 percent at $50 at the time of publication Friday. 

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Latest Ratings for BL

Date Firm Action From To
Feb 2019 Reinstates Buy
Jan 2019 Downgrades Outperform Market Perform
Nov 2018 Maintains Overweight Overweight

View More Analyst Ratings for BL
View the Latest Analyst Ratings

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