Backblaze (BLZE) Stock Forecast & Price Target

Backblaze, Inc. has demonstrated robust revenue growth of at least 20% year-over-year for the past five years, with expectations for continued acceleration through FY25, particularly in its B2 Cloud Storage segment, which is anticipated to reach 30% year-over-year growth by the fourth quarter of FY25. The company has also experienced significant momentum in customer acquisition, particularly in the artificial intelligence (AI) sector, where AI customers have increased by 66% year-over-year and AI customer data has surged 25 times year-over-year as of the first quarter of FY25. Additionally, Backblaze's introduction of the B2 Overdrive offering is strategically positioned to cater to organizations with extensive storage needs, which positions the company favorably within the rapidly evolving demands of AI, machine learning, and high-performance computing workloads.

Backblaze Inc has consistently faced challenges with profitability, exhibiting historically negative free cash flow and earnings. The company's predominant revenue source, the Computer Backup service, accounted for 48% of revenues in the first quarter of fiscal year 2025, but projected growth is anticipated to slow to single-digit rates in subsequent years. Additionally, the extensive infrastructure required for operations results in significant depreciation costs that adversely affect GAAP gross margins, further complicating financial performance.