Stock Analysis

Blackline Safety Corp. (TSE:BLN) Analysts Are Pretty Bullish On The Stock After Recent Results

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The analysts might have been a bit too bullish on Blackline Safety Corp. (TSE:BLN), given that the company fell short of expectations when it released its first-quarter results last week. It was a pretty negative result overall, with revenues of CA$26m missing analyst predictions by 2.7%. Worse, the business reported a statutory loss of CA$0.08 per share, much larger than the analysts had forecast prior to the result. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Blackline Safety

TSX:BLN Earnings and Revenue Growth March 18th 2024

Taking into account the latest results, the consensus forecast from Blackline Safety's nine analysts is for revenues of CA$127.3m in 2024. This reflects a sizeable 21% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 37% to CA$0.20. Before this latest report, the consensus had been expecting revenues of CA$129.4m and CA$0.14 per share in losses. So it's pretty clear the analysts have mixed opinions on Blackline Safety even after this update; although they reconfirmed their revenue numbers, it came at the cost of a massive increase in per-share losses.

Although the analysts are now forecasting higher losses, the average price target rose 6.7% to 5.38889, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Blackline Safety, with the most bullish analyst valuing it at CA$7.00 and the most bearish at CA$4.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 29% growth on an annualised basis. That is in line with its 29% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 3.4% annually. So it's pretty clear that Blackline Safety is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Blackline Safety. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Blackline Safety. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Blackline Safety going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 2 warning signs for Blackline Safety (1 shouldn't be ignored!) that you need to be mindful of.

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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.