Blend Labs, Inc. (NYSE:BLND) defied analyst predictions to release its third-quarter results, which were ahead of market expectations. Revenues and losses per share were both better than expected, with revenues of US$45m leading estimates by 7.7%. Statutory losses were smaller than the analystsexpected, coming in at US$0.03 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Blend Labs after the latest results.
Following the latest results, Blend Labs' six analysts are now forecasting revenues of US$197.1m in 2025. This would be a huge 26% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 88% to US$0.042. Before this earnings announcement, the analysts had been modelling revenues of US$201.7m and losses of US$0.056 per share in 2025. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a very favorable reduction to losses per share in particular.
The consensus price target rose 8.4% to US$3.88, with the analysts increasingly optimistic about shrinking losses, despite the expected decline in revenue. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Blend Labs analyst has a price target of US$4.75 per share, while the most pessimistic values it at US$3.25. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Blend Labs shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Blend Labs' rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 7.6% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Blend Labs to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. They also downgraded Blend Labs' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, long term profitability is more important for the value creation process. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Blend Labs going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Blend Labs that you should be aware of.
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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.
