Backblaze, Inc.

Where It Passes

Where It Falls Short

• Profitability0% pass✓ 4✗ 31▾

  No clean pass — all 16 investors flag at least one profitability criterion

  Positive EPS (10 years)0/7 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)0/7 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-64.7%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-16.2% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-4.7M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE-23.4%

  ✗Lynch> 15%

  EBIT / Enterprise Value-4.4%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-4.4%, ROC=-25.4%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-13.35%

  ✗PiotroskiROA > 0

  ROA Change YoY-28.79% -> -13.35% (delta: +15.44%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=12.27%, ROA=-13.35%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY54.3% -> 60.9%

  ✓PiotroskiImproved YoY

  Pre-Tax Income / Revenue-11.4%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-23.4%

  ✗Dreman> 12%

  Margin of SafetyP/B=5.2x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity-75.4% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency0/6 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue-9.4%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-23.4%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-56.8% (2023) -> -16.2% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 48.9% -> 60.9%, operating margin -56.8% -> -16.2%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization-3.89%; #3764/6340 (top 59.4%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+24.23%; #1779/3702 (top 48.1%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity-23.39%; #3763/5226 (top 72.0%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.1233; #3736/5884 (top 63.5%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years0/6 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Growth0% pass✓ 3✗ 10▾

  No clean pass — all 8 investors flag at least one growth criterion

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthN/A (no inventory)

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency0/6 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth19.8%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 48.9% -> 60.9%, operating margin -56.8% -> -16.2%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR22.1%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Verdicts7% pass✓ 1✗ 14▾

  Split decision: 13 FAIL · 2 NEUTRAL · 1 PASS

  Overall verdict

  ✗GrahamFAIL (2/9)✗BuffettFAIL (0/9)✗LynchFAIL (2/7)✗GreenblattRank #2140•PiotroskiNEUTRAL (F-Score 6)✗DremanFAIL (2/11)✗MungerFAIL (0/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (0/5)✓AckmanPASS (5/9)✗TempletonFAIL (3/8)✗SleepFAIL (2/6)✗AsnessFAIL (Rank #1610/2370 (Top 67.9%))✗NeffFAIL (2/6)✗SchlossFAIL (2/7)•OshaughnessyNEUTRAL (Not ranked)
• Valuation8% pass✓ 2✗ 26▾

  12 of 13 flag BLZE's valuation — Graham, Lynch, Greenblatt +9 more

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio5.2x

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-4.4%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-4.4%, ROC=-25.4%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)18.5x

  ✗Dreman< 8x

  Price / Book Value per Share5.2x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessOE Yield=-1.1%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=3.9%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=5.2x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share23.1x

  ✓Ackman<= 25

  Price vs. Trailing Low226% of trailing low ($3.43)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization-3.89%; #3764/6340 (top 59.4%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.1662; #4377/6449 (top 67.9%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share5.23x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.3389; #3147/5247 (top 60.0%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+5.62%; #1456/4519 (top 32.2%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+125.66%; #254/6202 (top 4.1%)

  ✓OshaughnessyTop 10% of eligible cross-section
• Efficiency25% pass✓ 3✗ 8▾

  6 of 8 flag BLZE's efficiency — Buffett, Greenblatt, Piotroski +3 more

  Current Ratio3.17

  ✓Graham>= 2.0

  ROIC (3-5 yr avg)-50.6%

  ✗Buffett> 10%

  ROIC - WACC-60.6%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)-25.4%

  ✗Greenblatt> 25%

  Current Ratio Change YoY1.10 -> 1.07

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.76x -> 0.76x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities3.17

  ✓Dreman> 1.5

  Return on Invested Capital-9.2%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=-64.6%; FY2024: ROIC=-35.0%; FY2025: ROIC=-15.7%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest -15.7%)

  ✗SleepROIC > 12% in a majority of years
• Cash Flow40% pass✓ 6✗ 6▾

  6 of 10 flag BLZE's cash flow — Buffett, Dreman, Pabrai +3 more

  Free Cash Flow Proxy$-4.7M

  ✗BuffettPositive and growing

  FCF Positive and Growing$27.5M

  ✓LynchPositive and growing

  Operating Cash Flow$23.5M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=12.27%, ROA=-13.35%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)18.5x

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=3.9%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive3/6 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap6.3%

  ✓Ackman>= 4%

  Price / FCF per Share23.1x

  ✓Ackman<= 25

  Positive Operating Cash Flow frequency4/6 years positive

  ✗SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$27.5M

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+5.62%; #1456/4519 (top 32.2%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Debt & Leverage42% pass✓ 7✗ 8▾

  7 of 12 flag BLZE's debt & leverage — Graham, Buffett, Lynch +4 more

  LT Debt vs Net Current AssetsLT Debt $194.5M vs NCA $171.1M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.64, IC: -2.8x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.64

  ✗Lynch< 0.33

  Cash - Long-term Debt$-5.5M

  ✗LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities3.17

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.64

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Debt Levels0.64

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=-2.8x, D/EBITDA=4.3x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.64

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.6410; #2732/4210 (top 64.9%)

  ✗AsnessTop 30% of eligible cross-section
• Valuation models50% pass✓ 1✗ 1▾

  Models split on BLZE at $7.74 — fair values range $6.11–$12.01

  Munger fair value$6.11

  ✗Munger-26.7% margin vs $7.74

  Ackman fair value$12.01

  ✓Ackman+35.6% margin vs $7.74