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Bull Of The Day: Blackbaud (BLKB)

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Blackbaud (BLKB - Free Report) is a Zacks Rank #2 (Buy) and it is the Bull of the Day today. We are still seeing stocks with the smallest of positive revisions rising to the level of a Zacks Rank #2 (Buy) or a Zacks Rank #1 (Strong Buy) and that means the the majority of stocks are still seeing negative earnings estimate revisions.  This stock is seeing positive revisions, so let's take a deeper look at BLKB.

Description

Blackbaud, Inc. provides cloud software solutions to nonprofits, foundations, companies, education institutions, healthcare organizations, and individual change agents in the United States and internationally. It sells its solutions and related services through its direct sales force. The company was founded in 1981 and is headquartered in Charleston, South Carolina.

Earnings History

I like the see a history of beats for any stock. It tells me that management knows how to communicate with Wall Street and properly set expectations. I see BLKB has beaten the Zacks Consensus Estimate in each of the last four quarters.

Over that time horizon, the average positive earnings surprise is 11%. A double digit average is always good to see!

Estimate Revisions

The impact of COVID is still being felt as most stocks have seen estimates move a lot lower over the last 90 days. BLKB is not immune to that, but the Zacks Rank only looks at the last 60 days of earnings estimate revisions. The current quarter has seen a decline of 2 cents over the last 60 days, while next quarter has held still.

The Zacks Rank cares more about the full year numbers and I see an increase for this year. The number was at $2.03 and it bumped higher by a penny and that is good enough to get a Zacks Rank #2 (Buy).

Valuation

The valuation is a stiff one, with the stock trading at just about 29x forward estimates. Investors also have to swallow the 7.7x book multiple and deal with topline growth of only 3.6%. Price to sales is at 3.2x while margins have stayed put at 6.7% on an operating basis. Sure there are other names with better valuations in the same space, but the reason that I choose this stock is that it is still well below the pre-crash highs. As more states reopen and the economy gets back to normal, this stock should have a decent runway ahead of it and that will make investors smile down the road.

Chart

 

Blackbaud, Inc. Price, Consensus and EPS Surprise

Blackbaud, Inc. Price, Consensus and EPS Surprise

Blackbaud, Inc. price-consensus-eps-surprise-chart | Blackbaud, Inc. Quote

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