Is BlackLine (BL) Undervalued On PCI Compliance News Or Is It Already Priced In?
BlackLine (BL) recently received Payment Card Industry Data Security Standard compliance validation for its PCI Detokenization Service, a move that opens the door to handling sensitive payment card workflows within its transaction matching and reconciliation platform.
For investors watching the share price, BlackLine has seen the 90 day share price return up 11.8% even as the year to date share price return is down 40.1%, and the 5 year total shareholder return down 73.1% signals that longer term momentum has weakened despite recent interest around developments such as the PCI DSS validation.
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For BlackLine, the recent PCI validation and the sharp 90 day rebound sit against years of weaker shareholder returns. Is this latest move a sign that the underlying business is turning a corner, or mainly a swing in sentiment that the valuation now needs to test?
Most Popular Narrative: 17% Undervalued
BlackLine's most followed narrative points to a fair value of $38.80 versus the last close at $32.21, which frames the recent PCI momentum inside a wider long term thesis.
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.
Want to see what sits behind that confidence? Revenue projections, margin rebuild, and a future profit multiple all pull in the same direction. The narrative joins them together.
Result: Fair Value of $38.80 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, there are still pressure points for BlackLine, including slower revenue growth guidance and tougher competition from integrated ERP suites that could challenge renewal and pricing power.
Find out about the key risks to this BlackLine narrative.
Another View On BlackLine’s Valuation
The analyst-led fair value of $38.80 suggests BlackLine is 17% undervalued relative to the last close at $32.21. However, on a P/E basis the picture looks tighter. BlackLine trades on 53.8x earnings, versus a peer average of 30.7x and a fair ratio of 50.9x. This implies there may be less margin for error if growth or margins fall short.
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
Given the mixed sentiment around BlackLine, this is a moment to move quickly, review the numbers for yourself and decide how the risk and reward balance looks. To see the full picture of both sides, take a closer look at the 2 key rewards and 2 important warning signs.
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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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