Citizens has reiterated a Market Outperform rating on Backblaze Inc (NASDAQ:BLZE) and kept its $8.00 price target, according to the firm. The stock is trading at $4.37 and has declined 47% over the past six months.
The research note said shares could remain under pressure in the short term until investors regain confidence in management's outlook and the company’s B2 business line realigns to a reacceleration pathway. Despite that caution, Citizens listed several fundamentals that support its positive view.
Fundamental drivers
Citizens pointed to Backblaze's competitively priced cloud storage offering as a source of differentiation in the market. The firm also noted that demand for cloud storage is being driven by AI-related use cases, which it believes is accelerating uptake.
Within Backblaze's product mix, the B2 cloud service has become the larger revenue contributor and is sustaining roughly 20% growth, the note said. For the trailing twelve months the company recorded 16% revenue growth and reported a gross profit margin of 59%.
Citizens additionally emphasized valuation and market opportunity. The firm cited a total addressable market estimated at $118 billion by 2028 and referenced InvestingPro analysis that characterizes Backblaze as undervalued at current levels, with analysts expecting the company to reach profitability this year.
Customer retention and resilience
The research highlighted metrics that Citizens interprets as evidence of a resilient business model: fiscal 2025 fourth quarter net revenue retention of 105% and gross revenue retention of 91%.
Investors seeking more exhaustive coverage can access Backblaze's Pro Research Report, which covers this company among more than 1,400 US equities, the firm noted.
Recent results and market reaction
Backing up the fundamental discussion, Backblaze reported a fourth quarter of fiscal 2025 earnings beat. The company posted earnings per share of $0.06, ahead of the $0.01 consensus forecast. Quarterly revenue reached $37.8 million versus an expected $37.59 million. Even with these results exceeding expectations, the stock moved lower in pre-market trading.
Outlook and investor considerations
Citizens’ reiteration of its Market Outperform rating and price objective reflects an emphasis on Backblaze’s product pricing, B2 growth, revenue retention metrics, and the firm’s view on the addressable market. At the same time, the note makes clear that near-term sentiment around management guidance and the pace of B2’s recovery will be central to the stock’s short-term trajectory.
Given the mix of supportive operating metrics and recent share price weakness, the firm’s stance strikes a balance between acknowledging execution and outlook risks while highlighting valuation and demand-driven growth potential.