Backblaze (BLZE) Stock Forecast & Price Target

Backblaze Inc has achieved impressive revenue growth, consistently surpassing 20% year-over-year for the past five years, indicating a strong demand for its cloud storage solutions. The company anticipates accelerating B2 revenue growth, projected to reach at least 30% year-over-year by the fourth quarter of FY25, supported by increasing momentum in AI customer acquisition and data storage demands. The introduction of the B2 Overdrive service, designed for organizations with multi-petabyte storage needs, positions Backblaze to capitalize further on the burgeoning AI, machine learning, and high-performance computing markets.

Backblaze Inc has demonstrated a persistent lack of profitability, with historical negative free cash flow and earnings presenting significant financial concerns. The company’s Computer Backup service, which accounted for 48% of revenues in F1Q25, is projected to experience growth deceleration into the single digits in future years, limiting potential revenue expansion. Additionally, substantial infrastructure costs resulting in high depreciation rates adversely affect the company's GAAP gross margins, highlighting ongoing challenges in maintaining financial health.