BlackLine (BL) valuation after Engaged Capital’s activist push over rejected takeover offers and governance concerns

Engaged Capital has turned up the heat on BlackLine (BL), formally demanding access to board records regarding multiple takeover offers, including a $66 per share proposal from SAP, and raising pointed questions about strategy and governance.

See our latest analysis for BlackLine.

The activist letter lands against a mixed backdrop, with BlackLine’s share price now at $57.78 and a solid 90 day share price return of 8.88 percent, in contrast to a weak 1 year total shareholder return of 9.01 percent and a deeply negative 5 year total shareholder return of 52.19 percent. This suggests that fresh deal speculation is giving short term momentum to a name that has long tested investors’ patience.

If this kind of catalyst driven move has you wondering what else might be setting up for a rerating, it could be worth exploring high growth tech and AI stocks as your next hunting ground.

With shares trading below both SAP’s indicative offer and some intrinsic value estimates, yet still reflecting a takeover premium, the real question is whether BlackLine remains a mispriced compounder or if the market is already banking on renewed growth.

Most Popular Narrative: 6.6% Undervalued

With BlackLine last closing at $57.78 against a narrative fair value just above $61, the story hinges on modest growth but premium pricing power.

The expansion of strategic integrations and partnerships with SAP, Snowflake, Oracle, and other leading ERPs is accelerating distribution and market penetration, supporting higher bookings and anticipated revenue growth into 2025 and beyond. BlackLine's shift to a value-based, unlimited-user pricing model and a focus on larger enterprise and mid-market clients is increasing net retention rates and improving margins through larger, longer-term contracts and higher account stickiness.

Read the complete narrative.

Want to see why steady revenue growth, shrinking margins, and a rich future earnings multiple still add up to upside potential in this narrative? The full breakdown reveals the surprising combination of assumptions driving that fair value.

Result: Fair Value of $61.83 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that upside depends on BlackLine overcoming modest growth and intense ERP competition, as slower deal cycles or pricing pressure could quickly undermine the thesis.

Find out about the key risks to this BlackLine narrative.

Build Your Own BlackLine Narrative

If you see the story differently or want to stress test your own assumptions, it only takes a few minutes to build a custom view: Do it your way.

A great starting point for your BlackLine research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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