I did look at OCF and FCF/EQ as well, but that didn’t look better and I thus didn’t post.
Here they are:
-
Operating Cash Flow
-
Free Cash Flow to Equity
The nature of (Hardware enabled) SaaS business is fundamentally different (recurring revenues with high GM% and thus also rather different benefits of scaling fast). Whether right/accurate or not, multiples of Sales are more often used than multiples of earnings/CF for valuation and this multiple is influenced by other metrics (like the Rule of 40).
In the end, if everybody agreed on the same valuation, there wouldn’t be much trading on the stock market so these differences keeps things interesting:)
Finally found a listed company which one could use as a reasonable benchmark: Samsara (ticker: IOT)
That company is much further ahead (1B+ revenues) and sheds a light on what’s possible. The valuation is rather heavy also… which points to Blackline being cheap.
Quiet volatile:
But still kind of expensive. Even after the drop of 15% on Friday…
All my multibagger have one thing in common: they were completely surprises. At the moment I hold the following multibagger, some of it kind of boring bigcaps: ABBV,AVGO,CAT,CEG,CMI,FTI,MET,NUE,SMCI,TRI,UTI and VIST
Definition of a multibagger is a capital gain of more than 100% without dividends. The key for multibaggers is to hold as long as possible… but not longer.
3 Likes
I would agree …
You’re still paying a multiple of over 100!
Also, in my mind I expand their ticker IOT into “Internet Of Things” which is a term that has been tainted by my déformation professionelle (in the cyber security space people like to think of the “Internet Of Things” as the “Internet Of Shit” …).*
That’s where we differ: I planned all of mine. 
Most of my multibaggers are also plain old boring companies (perhaps with the exception of Broadcom).
And as you state, time does most of the heavy lifting.
* The label stems from the fact that lots of these IOT devices are ticking time bombs as they go out of date and will never be patched, growing a fleet of Internet reachable vulnerable devices.
2 Likes
Agree that Samsara is expensive and what put me off a bit is that they’re not profitable despite having scaled quite a bit (more than 1 billion annual revenues if my memory serves me well).
Here is the recent earnings release from earlier today from Blackline Safety though:
"Blackline Safety Reports Record Fiscal First Quarter 2025 Revenue of $37.7 million, up 43%, and EBITDA of $2.1 million
Record Annual Recurring Revenue(1) (“ARR”) of $70.9 million, up 31% year-over-year
32nd consecutive quarter of year-over-year top-line growth
Blackline achieves “Rule of 40”(1)
Gross Margin improves to 60% in Q1, up 500 basis points year-over-year
Net Dollar Retention(1) (“NDR”) was 128%, seventh consecutive quarter above 125%"
So:
- continued strong growth
- EBITDA profitable at a much lower revenue number than Samsara
- when you compare the 2 companies… Samsara is in a hardware space which is a bit more mundane vs. the area Blackline is in
This is part of what makes investing so difficult and fun though… for every buyer there is also a seller with a different perspective:)
I like (understatement) the trajectory Blackline is on and the market opportunity they are addressing. THe Samsara reference was just to create some ‘fantasy’ about what the valuation of a Blackline could be (using the multiple on revenues).
I would never have uncovered Blackline if I was not an expert in the space they operate in. I suspect for the vast majority of investors they are well below the radar screen (due to being Canadian and small-cap).
Interesting times ahead - also Blackline had a drop past week and I pulled up the truck to acquire more shares. Will be curious how the market reacts to todays earnings release.
1 Like