Is It Time To Consider Buying Backblaze, Inc. (NASDAQ:BLZE)?

Backblaze, Inc. (NASDAQ:BLZE), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the NASDAQGM over the last few months. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today we will analyse the most recent data on Backblaze’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Backblaze

Is Backblaze Still Cheap?

According to our valuation model, Backblaze seems to be fairly priced at around 8.68% above our intrinsic value, which means if you buy Backblaze today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $9.16, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Backblaze’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Backblaze look like?

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. With profit expected to grow by 43% over the next couple of years, the future seems bright for Backblaze. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in BLZE’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 track record of its management team. 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 tabs on BLZE, now may not be the most optimal 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Backblaze, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 4 warning signs for Backblaze and you'll want to know about them.

If you are no longer interested in Backblaze, 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.