When Should You Buy BlackLine, Inc. (NASDAQ:BL)?

While BlackLine, Inc. (NASDAQ:BL) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$60.06 and falling to the lows of US$48.93. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether BlackLine's current trading price of US$50.17 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at BlackLine’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for BlackLine

What's The Opportunity In BlackLine?

According to my valuation model, BlackLine seems to be fairly priced at around 11.04% above my intrinsic value, which means if you buy BlackLine today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $45.18, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, BlackLine has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from BlackLine?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. BlackLine's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in BL’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on BL, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Be aware that BlackLine is showing 3 warning signs in our investment analysis and 1 of those doesn't sit too well with us...

If you are no longer interested in BlackLine, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.