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Why BlackLine Stock Jumped 18.6% in January

What happened

Shares of BlackLine (NASDAQ: BL) rose 18.6% in January, according to data from S&P Global Market Intelligence. The stock got a significant boost following favorable coverage from analysts.

BL data by YCharts.

Oppenheimer analyst Brian Schwartz published a note on BlackLine on Jan. 13, upgrading his rating on the stock from perform to outperform and putting a $75 price target on it. The target price suggested roughly 22% upside at the time of the note's publication. BidaskClub also published a positive note on the stock, raising the rating on the company from buy to strong-buy on Jan. 18.

Image source: Getty Images.

So what

Schwartz wrote in the Oppenheimer note that he sees BlackLine's fundamentals improving thanks to better execution at the business. He also stated that he believed that competitive threats that had been tamping down on the company's valuation were overblown and that the stock would perform better relative to other software-as-a-service (SaaS) companies this year. The cloud-based accounting software company climbed roughly 25.9% in 2019, while the S&P 500 index rose nearly 29%.

Now what

BlackLine is scheduled to report fourth-quarter earnings results after the market closes on Feb. 13. The company is guiding for revenue between $77.3 million and $78.3 million -- good for growth of roughly 25.5% at the midpoint of the target -- and non-GAAP (adjusted) earnings per share between $0.12 and $0.13 based on 59.9 million diluted weighted average shares.

BlackLine stock trades at roughly 10 times forward sales and 120 times forward earnings.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends BlackLine, Inc. The Motley Fool has a disclosure policy.


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