Backblaze (BLZE) Stock Forecast & Price Target

Backblaze Inc. has demonstrated robust financial performance, with a notable 18% year-over-year increase in Annual Average Revenue Per User (ARPU), reaching $268 in 2024. The company's customer base for accounts greater than $50,000 in Annual Contract Value (ACV) has surged by 55% year-over-year, indicating strong demand and growth traction. Additionally, Backblaze's B2 Cloud Storage segment is projected to achieve double-digit growth in 2025, supported by a recent go-to-market strategy and product innovations, paving the way for sustainable, positive Adjusted Free Cash Flow and potential for durable operations aligned with the Rule of 40 in the coming years.

Backblaze Inc has not achieved sustainable profitability, as evidenced by negative Adjusted EBITDA Margins of (11%) and (4%) for 2022 and 2023, respectively, along with significant losses on an adjusted Free Cash Flow basis. Despite a forecasted growth in the Computer Backup segment in the first half of 2025 due to price increases, the segment is expected to decline in the second half of the year, leading to flat year-over-year revenue for the full year. Additionally, while the company maintains a Gross Retention rate of over 90%, there was a slight decline in customer count, indicating potential challenges in retaining customers amidst ongoing secular declines in the consumer Backup market.