Investors may worry about the idea of investing in a smaller company in a competitive market whose financials need improvement. This is very low for a tech company, especially compared to another tech company like Cloudflare. If we extrapolate Backblaze's 2021 first half revenue for the entire year, that gives us an EV/revenue ratio of around 11.6. If we assume a market cap of $671 million as noted above, this gives the company an enterprise value of $729.4 million. Backblaze had $1.3 million in cash and $59.7 million in total liabilities. But even then, this company could still be a good deal at the right price. In summation, investors should hope that Backblaze improves either its profitability or its revenue growth going forward.
#Cloud backblaze nasdaq friday 650mnovetcnbc software
The Rule of 40 often states that a good software company is one whose revenue growth and profitability combined should reach at least 40. Even ignoring the ways in which adjusted EBITDA can sometimes be massaged, this margin in addition to the revenue growth gives a total of 35.4. On the other hand, Backblaze is using an adjusted EBITDA to argue that it had a positive figure of $3.6 million, which would be a margin of 11.4%. Its gross margin also decreased to 52% to 49% as well. Backblaze reported a net loss of $6.1 million in the first half of 2021, up from $1.3 million over the same timeframe in 2021. This represents a decrease in revenue growth, as Backblaze grew by 32% from 2019 to 2020, and thus is a concern.īackblaze's revenue is thus a somewhat mixed bag and the same can be said for its profitability numbers. Backblaze reported a revenue of $31.5 million in the first half of 2021, up 24% compared to the same time last year. Finances and Valuationīut while the company has immense growth potential, there are some concerns about its financial numbers. The successful example of other competitors like Cloudflare (NYSE: NET) and the recent debut of DigitalOcean (NYSE: DOCN) also shows that Backblaze can continue to succeed by focusing on smaller consumers.
These factors have given the company a net retention rate of 113% and 114% in 20 respectively.īackblaze has thus shown an ability to compete with Amazon, and it has immense capacity to grow given the potential of the cloud market both now and going forward. Furthermore, Backblaze has a robust marketing including its successful blog and organic traffic. Focusing on the essentials keeps things simple and affordable, and the company states that its primary target are midmarket organizations with 10-999 members. Both tasks are critical especially as there is an increased focus on cybersecurity, and yet there are no additional bells and whistles which add some value but largely keep smaller businesses confused. Backblaze offers cloud storage and a computer backup service, and that is it. Smaller businesses can find themselves overwhelmed by the array of services Amazon offers and are unable to make effective use of it.
But for all of Amazon's success, it has increasingly become a company which focuses on larger organizations. Some investors may wonder how a company worth less than $1 billion can hope to stand up to the Amazon titan. It is the "easy and affordable" part of that quote which explains Backblaze's success. Changing the Cloud Marketīackblaze describes itself in its prospectus as "a leading storage cloud platform, providing businesses and consumers cloud services to store, use, and protect their data in an easy and affordable manner." The company has attracted 480,000 customers across 175 countries and keeps over 500 billion files available on demand. While there are some concerns in its financial numbers, it has a low valuation and other points in its favor. This is a company which has managed to find its own niche in the cloud market despite the presence of giants like Amazon (NASDAQ: AMZN). Backblaze CEO Gleb Budman told Business Insider that "sitting on a large pile of cash on day one" worsens efficiency and morale, and so raised less than $3 million from outside investors.īut despite or perhaps because of these unusual qualities, there is a lot to like about Backblaze's potential. There has been a great deal of interest in Backblaze for the fact that it debuted at such a small market cap compared to the other IPOs which have market caps in the billions, as well as the fact that it raised so little from private investors. This gives the company a market cap of $671 million. The company saw its stock rise almost instantly, and currently sits at $22.99 as of Monday morning, a 44% increase. According to MarketWatch, Backblaze raised $100 million shares by selling 6.25 million shares at $16 apiece. Lucky-photographer/iStock Editorial via Getty Imagesīackblaze (NASDAQ: NASDAQ: BLZE) launched its public IPO on Thursday, and the cloud company has had a strong start.
0 kommentar(er)
