Blend Labs (BLND, Financial), a prominent digital platform serving banks, credit unions, and mortgage lenders, has reached a definitive agreement to sell its Title365 Holding to Covius Services. This transaction is contingent upon obtaining necessary third-party consents and regulatory approvals and is anticipated to conclude in the coming months.
Covius Services is eager to integrate Title365 into its operations, as it will bolster its capabilities in the title origination market. This acquisition aligns with Covius' strategic aim to offer a comprehensive array of technologically advanced products and services which span origination, servicing, and capital markets. The move is set to enhance Covius' market standing, particularly in the areas of loss mitigation and default title services.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Blend Labs Inc (BLND, Financial) is $5.01 with a high estimate of $7.00 and a low estimate of $4.00. The average target implies an upside of 33.02% from the current price of $3.77. More detailed estimate data can be found on the Blend Labs Inc (BLND) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, Blend Labs Inc's (BLND, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Blend Labs Inc (BLND, Financial) in one year is $1.49, suggesting a downside of 60.42% from the current price of $3.765. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Blend Labs Inc (BLND) Summary page.
BLND Key Business Developments
Release Date: May 08, 2025
- Platform Revenue: $26.8 million in Q1 2025, a 12% year-over-year growth.
- Mortgage Suite Revenue: $14.6 million in Q1 2025.
- Consumer Banking Suite Revenue: $9.6 million, a 45% year-over-year increase.
- Professional Services Revenue: $2.5 million in Q1 2025.
- Platform Non-GAAP Gross Profit: $19.5 million, with a gross margin of 73%.
- Operating Expenses: $18.5 million, down $9 million year-over-year.
- Non-GAAP Operating Income: $1 million, representing a 4% operating margin.
- Free Cash Flow: $15.5 million, with a free cash flow margin of 58%.
- Cash and Equivalents: Approximately $110 million at the end of Q1 2025.
- Share Repurchase: 923,000 shares repurchased for $3.1 million.
- Remaining Performance Obligations (RPO): $158.1 million, setting a record for Blend.
- Economic Value per Funded Loan: $93 in Q1 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Blend Labs Inc (BLND, Financial) achieved positive free cash flow of $15.5 million in Q1 2025, marking a record for the company.
- The company reported three consecutive quarters of non-GAAP operating profitability.
- Blend Labs Inc (BLND) signed 11 new or expanded deals in Q1 2025, nearly three times more than the same period last year.
- The company announced a $50 million renewal and expansion deal with a top financial institution, showcasing its ability to scale with customers.
- Blend Labs Inc (BLND) is transitioning to a software-first model, which is expected to drive higher absolute profit dollars and improve gross margins.
Negative Points
- The potential sale of the title insurance business may result in lower reported revenue compared to typical title transactions.
- Economic value per funded loan was $93 in Q1 2025, slightly below the guidance of $94.
- The company anticipates economic value per funded loan to decrease to $88 in Q2 2025, marking a trough before expected improvements.
- Blend Labs Inc (BLND) faces challenges from macroeconomic volatility, including potential impacts from tariffs and banking deregulation.
- The transition to a partner-first model may initially put downward pressure on economic value per funded loan as new customers start with core applications before expanding.
