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Blend Labs Shares Crash on Extremely Weak Sales Guidance, Prompting 3 Firms to Downgrade -Breaking

by Mike Robinson

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© Reuters. Blend Labs (BLND), Shares Drop on Very Poor Sales Guidance. 3 Firms Decide to Re-Grade

The Shares Blend Labs Premarket trades for (NYSE:) fell more than 15% Friday, after the company released disappointing guidance.

Digital lending platform BLND reported a loss per share of 32c and a loss from operations of $59.9 million in Q4, almost matching the analyst consensus at $81.2 million. BLND suffered a Q4 loss per shares of 32c, and a loss in operations of $59.9 millions. The fourth quarter adjusted loss from operations totaled $38.7million.

Blend Labs anticipates FY revenues in the region of $230 to $250 Million, which is well below consensus estimates of $343.7 millions.

Nima, founder and head of Blend, stated, “As such, full-year Blend Platform income grew by 41% in 2020-2021 despite a decrease in U.S. Mortgage industry origination volumes.”

Also, we grew our market share in mortgage banking, multi-product clients, and total revenues.

Michael Turrin, a Wells Fargo analyst, downgraded BLND shares from Equal Weight because of the likelihood that headwinds will continue. New price targets are $5.00 and $11.00 respectively.

BLND shares have slowed since the company’s July 2013 public offering (-22% YTD vs. NASDAQ -9%) because of a unfortunate succession of company-specific growth pains and macro-influenced factors. Turrin wrote in a client note that given the lack of catalysts for near-term growth and the possibility these patterns will persist, we decided to downgrade BLND share.

Similarly Arvind Rajnani, Piper Sandler analyst, downgraded BLND stock as Overweight from Neutral and set a price target of $5.50 (down from $10.00).

Ramnani wrote in a client note that “the downgrade decision comes on pressured ReFi volume and tempered growth expections.”

“However, we maintain Blend is a differentiated digital mortgage provider that we expect to generate shareholder appreciation long-term, as headwinds abate and the company scales volumes & market share.”

Joseph Vafi, a Canaccord Genuity analyst, also downgraded Blend Labs to Buy from Hold with a target price of $5.00 (from $28.00).

By Senad Karaahmetovic

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