Shares of Blend Labs (NYSE:BLND) are down more than 15% in premarket trading Friday after the company reported disappointing guidance.
The digital lending platform reported fourth-quarter revenue of $81 million, almost in line with the analyst consensus of $81.2 million. BLND posted a Q4 loss per share of 32c and a loss from operations of $59.9 million in the period. Adjusted loss from operations in the fourth quarter totaled $38.7 million.
Blend Labs expects FY revenue in the range of $230 million to $250 million, well below the consensus estimates of $343.7 million.
"As a result, full-year Blend Platform revenue grew by 41% from 2020 to 2021, despite a decline in U.S. mortgage industry origination volumes," said Nima Ghamsari, Founder and Head of Blend.
We also grew our mortgage banking market share, multi-product customers, and total revenues.
Wells Fargo analyst Michael Turrin downgraded BLND shares to Equal Weight as headwinds are likely to persist. A new price target is $5.00 per share, down from the prior $11.00.
BLND shares have lagged since the company went public in July of last year, (-22% YTD vs. NASDAQ -9%) as an unfortunate series of both macro-influenced and company-specific growing pains have surfaced. Given a lack of near-term catalysts and likelihood these patterns persist, we elect to downgrade BLND shares, Turrin said in a client note.
Similarly, Piper Sandler analyst Arvind Ramnani downgraded BLND stock to Neutral from Overweight with a $5.50 per share price target (down from $10.00).
"The downgrade move comes on pressured ReFi volumes and tempered growth expectations," Ramnani writes in a client note.
"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."
Finally, Canaccord Genuity analyst Joseph Vafi also downgraded Blend Labs from Buy to Hold with a price target of $5.00 (from $28.00).
By Senad Karaahmetovic