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Blend Labs (BLND)
NYSE:BLND
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Blend Labs
(NYSE:BLND)
55Neutral
Positive Factors
Contract Extensions
Mr. Cooper just extended its contractual term with Blend, suggesting that the company sees value in the Blend relationship and has some level of committed future revenue.
Insider Buying
Insider buying from Haveli Investments is seen as encouraging, as they have a Board seat and a substantial existing investment in Blend Labs.
Product Expansion
The product suite continues to expand nicely with the rollout to full production of the 'Rapids' — Rapid Refi and Rapid Home Equity.
Negative Factors
Interest Rate Environment
The interest rate environment did take an unexpected turn to a bit 'higher for longer,' impacting mortgage-related revenue.
Regulatory Scrutiny
The RKT/COOP deal is likely to receive regulatory scrutiny from the FTC.
Revenue Guidance
Guidance was disappointing with expected Blend Platform revenue falling short of consensus estimates.
Blend Labs (BLND) vs. S&P 500 (SPY)
Market Cap
$924.40M
Dividend YieldN/A
Average Volume (3M)3.94M
Price to Earnings (P/E)―
Beta (1Y)2.38
Revenue Growth3.30%
EPS Growth68.45%
CountryUS
Employees540
SectorTechnology
Sector Strength44
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.24
Shares Outstanding255,914,700
10 Day Avg. Volume2,886,202
30 Day Avg. Volume3,936,465
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)5.85
Price to Cash Flow (P/CF)-51.70
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5.05Price Target Upside41.85% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Blend Labs Business Overview & Revenue Model
Company DescriptionBlend Labs, Inc. (BLND) is a technology company that provides cloud-based software solutions with a focus on the financial services industry. The company's platform is designed to streamline the consumer lending process, enabling financial institutions to offer a digital-first experience for mortgages, consumer loans, and deposit accounts. By simplifying the loan origination process, Blend helps its clients increase efficiency, improve customer satisfaction, and reduce costs.
How the Company Makes MoneyBlend Labs generates revenue primarily through a software-as-a-service (SaaS) model, where financial institutions pay subscription fees to access and use its platform. Revenue streams include licensing fees based on transaction volume, which can vary depending on the number of applications processed through their system. Additionally, Blend may earn revenue from professional services such as implementation, customization, and ongoing support. Key partnerships with major banks and lenders help expand its market reach and drive adoption of its platform. Factors like the overall health of the mortgage and consumer lending markets, as well as the demand for digital transformation in financial services, significantly influence the company's earnings.
Blend Labs Financial Statement Overview
Summary
Blend Labs is facing significant financial challenges, with declining revenue and ongoing losses. The company has negative equity and its liabilities exceed assets, indicating financial instability. Some improvement in cash flow management is noted, but strategic restructuring is necessary.Income Statement
Blend Labs has shown a decrease in total revenue over the years, with a significant drop from 2022 to 2023. The gross profit margin remains decent at around 55.7% for TTM (Trailing-Twelve-Months), but the company is struggling with negative EBIT and net income margins, indicating continued operating losses. The net profit margin for TTM is -34.8%, reflecting ongoing challenges in achieving profitability.45
Neutral
Balance Sheet
The balance sheet reflects a concerning financial position with negative stockholders' equity for the TTM period, highlighting financial instability. The debt-to-equity ratio is not applicable due to negative equity. With liabilities exceeding assets, the equity ratio is negative, posing a significant risk. The company's financial structure requires restructuring to support sustainability.40
Negative
Cash Flow
The cash flow statement shows some improvement in free cash flow, with the TTM free cash flow less negative compared to the previous year, indicating better cash management. However, the operating cash flow remains negative, and the free cash flow to net income ratio is less meaningful due to negative net income. The overall cash flow situation requires careful management to avoid liquidity issues.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 162.02M | 156.85M | 235.20M | 234.50M | 96.03M | Gross Profit |
| 90.54M | 81.14M | 89.65M | 115.99M | 61.74M | EBIT |
| -49.62M | -156.22M | -281.22M | -197.24M | -75.29M | EBITDA |
| -49.62M | -143.21M | -726.85M | -182.94M | -68.24M | Net Income Common Stockholders |
| -60.48M | -185.32M | -763.81M | -169.14M | -74.62M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 98.48M | 136.92M | 354.15M | 547.23M | 151.72M | Total Assets |
| 178.01M | 206.06M | 432.76M | 1.11B | 215.75M | Total Debt |
| 801.00K | 149.69M | 231.98M | 228.45M | 16.58M | Net Debt |
| -41.44M | 118.73M | 107.78M | 15.37M | -24.51M | Total Liabilities |
| 40.33M | 179.12M | 268.84M | 301.89M | 52.41M | Stockholders Equity |
| -56.36M | -19.24M | 123.17M | 774.64M | 163.34M |
| Cash Flow | Free Cash Flow | |||
| -22.89M | -128.21M | -192.49M | -129.39M | -66.33M | Operating Cash Flow |
| -13.04M | -127.62M | -190.42M | -127.50M | -65.01M | Investing Cash Flow |
| 45.40M | 127.31M | 99.43M | -633.91M | -7.92M | Financing Cash Flow |
| -21.06M | -90.96M | 2.22M | 933.57M | 90.76M |
Blend Labs Technical Analysis
Negative
3.56
Price Trends
3.64
Negative
4.08
Negative
3.67
Negative
Market Momentum
-0.02
Negative
43.49
Neutral
18.75
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BLND, the sentiment is Negative. The current price of 3.56 is above the 20-day moving average (MA) of 3.43, below the 50-day MA of 3.64, and below the 200-day MA of 3.67, indicating a bearish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 43.49 is Neutral, neither overbought nor oversold. The STOCH value of 18.75 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BLND.
Blend Labs Risk Analysis
Blend Labs disclosed 72 risk factors in its most recent earnings report. Blend Labs reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Blend Labs Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $54.40B | 31.41 | 44.25% | 2.60% | 4.35% | 4.86% | |
64 Neutral | $12.99B | 30.44 | 8.26% | ― | 29.33% | ― | |
57 Neutral | $20.97B | 10.32 | -14.01% | 2.49% | 4.46% | -23.38% | |
55 Neutral | $924.40M | ― | -93.00% | ― | 3.30% | 68.45% | |
53 Neutral | $1.18B | 22.89 | 3.96% | ― | 3.63% | 27.77% | |
51 Neutral | $26.01B | 77.42 | 4.43% | ― | 30.23% | ― | |
51 Neutral | $4.43B | ― | -20.27% | ― | 24.50% | 49.38% |
* Technology Sector Average
Performance Comparison
BLND
Blend Labs
3.35
0.28
9.12%
PAYX
Paychex
154.28
36.17
30.62%
LC
LendingClub
10.32
1.56
17.81%
RKT
Rocket Companies
12.07
-1.05
-8.00%
UPST
Upstart Holdings
46.03
19.60
74.16%
SOFI
SoFi Technologies
11.63
4.41
61.08%
Blend Labs Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 1.42% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant growth in consumer banking and successful new customer acquisitions, alongside strategic partnerships and AI integration. However, challenges such as the decline in mortgage economic value and ongoing macroeconomic pressures were also noted.Highlights
Consumer Banking Growth
Consumer banking business grew 42% in 2024, surpassing the 35% target, with Q4 revenue growing 48% year-over-year.
New Customer Acquisitions
Signed multi-year agreements with a top 10 U.S. bank by asset size and PHH Mortgage, expanding the customer base.
Non-GAAP Operating Income Profitability
Achieved a second consecutive quarter of non-GAAP operating income profitability with $5.2 million in Q4.
Pipeline Growth
Pipeline is 50% larger than the previous year, indicating strong potential for sustained growth.
Expansion of Partner Ecosystem
Strategic partnerships with companies like Truework and Covered Insurance Solutions to enhance service offerings and reduce operational costs.
AI Integration
Plans to incorporate AI into platforms to streamline operations and reduce costs, with Srini Venkatramani leading the initiative.
Lowlights
Mortgage Economic Value Decline
Mortgage suite economic value per funded loan declined to $96 in Q4 from $99 in Q3, attributed to strategic partnerships affecting revenue.
Free Cash Flow Challenges
Free cash flow for the quarter was negative $7.2 million, although improved from the prior year's negative $20.8 million.
Macroeconomic Pressure
The mortgage market remains subdued, with industry forecasts expecting a decline in origination activity.
Company Guidance
During the call, Blend provided guidance for the first quarter of 2025 and full year 2025, emphasizing their confidence despite challenging macroeconomic conditions. The company expects platform revenue to be between $25 million and $27 million for Q1 2025, projecting a 9% year-over-year growth. They anticipate positive free cash flow margin in Q1, exceeding their market normalized rate of 18%. Blend's consumer banking business, which grew 42% in 2024, is expected to continue its momentum with a revised compounded annual growth rate of 40% through 2026. The company also aims to achieve a positive Rule of 40 for their platform segment by the end of 2025, indicating a balance between growth and profitability. These projections are supported by a 50% year-over-year increase in their pipeline, signaling strong potential for sustained growth.Blend Labs Corporate Events
Business Operations and StrategyFinancial Disclosures
Blend Labs Reports Strong Q4 2024 Financial Results
Positive
Feb 27, 2025
On February 27, 2025, Blend Labs announced its financial results for the fourth quarter and full year 2024, highlighting significant achievements despite challenging macroeconomic conditions. The company reported a 42% annual revenue growth in its Consumer Banking business and welcomed major new customers, including PHH Mortgage and a top 10 U.S. bank. Blend achieved its most profitable quarter yet, with a 15% year-over-year revenue increase in Q4 to $41.4 million, driven by strategic partnerships and product innovations. The company also reported a non-GAAP operating income of $5.2 million, surpassing guidance, and continued to diversify its revenue streams with a focus on high-margin partnerships and software model simplification.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.