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Here's Why Blackbaud (BLKB) Seems an Attractive Investment Bet
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Record inflation, a hawkish Fed policy, lingering supply chain issues and uncertainty prevailing over global macroeconomic conditions have raised investors’ apprehension.
Blackbaud has the favorable combination of a Growth Score of B and a Zacks Rank #2. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 or #2 and a Growth Score of A or B offer solid investment opportunities.
The stock is down 29.5% from its 52-week high level of $83.98 reached on Jan 04, 2022, making it more affordable for investors.The stock has lost 26.1% in the past year against the industry’s decline of 31.1%.
Image Source: Zacks Investment Research
Blackbaud has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average earnings surprise of 5%. The stock has long-term earnings per share growth expectation of 4%.
The Zacks Consensus Estimate for 2022 for earnings stands at $2.59 per share. For 2023, the consensus mark for earnings is pegged at $3.36, indicating a year-over-year increase of 29.5%. The consensus mark for revenues for 2022 and 2023 stands at $1.06 billion and $1.11 billion, representing year-over-year growth of 14.3% and 5%, respectively.
In the last reported quarter, Blackbaud’s total revenues increased 13% year over year to $261.3 million. The top line was driven by strength in recurring revenues.
For 2022, Blackbaud expects non-GAAP revenues between $1.05 billion and $1.07 billion. The company projects a non-GAAP adjusted EBITDA margin in the range of 23.7-24.2%. Non-GAAP earnings are expected to be between $2.43 and $2.63 per share. Non-GAAP adjusted free cash flow for the year is forecast in the range of $140-$150 million.
A Look at Fundamental Drivers
Headquartered in Charleston, SC, Blackbaud is a well-known cloud software company. The company offers a full spectrum of cloud-based and on-premise software solutions and related services for organizations of all sizes, especially social good organizations.
Blackbaud's cloud-based suite of applications demonstrates strong growth momentum, driven by the transition of organizations from the traditional revenue-based model to the cloud-based subscription model.
Frequent product launches and synergies from recent acquisitions bode well. The acquisition of EVERFI has helped the company to expand its total addressable market by about two times. In January 2022, the company acquired EVERFI in a cash-and-stock deal worth $750 million. EVERFI provides an Impact-as-a-Service solution and digital educational content. The acquisition also provides cross-selling and upselling opportunities with Blackbaud’s YourCause solution.
However, uncertainty prevailing over global macroeconomic conditions and rising inflation are major headwinds. A leveraged balance sheet adds to the risk of investing in the company. As of Sep 30, Blackbaud had total cash and cash equivalents of $375.4 million, while total debt (including the current portion) amounted to $854.1 million. Blackbaud had suspended dividend payouts to maintain near-term liquidity amid the COVID-19 crisis.
Other Stocks to Consider
Some other top-ranked stocks from the broader technology space are Arista Networks (ANET - Free Report) , Pure Storage (PSTG - Free Report) and Jabil (JBL - Free Report) . Arista Networks and Jabil currently sport a Zacks Rank #1, while Pure Storage carries a Zacks Rank #2.
The Zacks Consensus Estimate for Arista Networks’ 2022 earnings is pegged at $4.33 per share, up 7.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have increased 0.5% in the past year.
The Zacks Consensus Estimate for Pure Storage’s fiscal 2023 earnings is pegged at $1.18 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 35.5%.
Pure Storage’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 171.8%. Shares of PSTG have gained 13.9% in the past year.
The Zacks Consensus Estimate for Jabil’s fiscal 2023 earnings is pegged at $8.18 per share, rising 3.8% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 9.3%. Shares of JBL have increased 5% in the past year.
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Here's Why Blackbaud (BLKB) Seems an Attractive Investment Bet
Record inflation, a hawkish Fed policy, lingering supply chain issues and uncertainty prevailing over global macroeconomic conditions have raised investors’ apprehension.
Amid the ongoing volatility, Blackbaud (BLKB - Free Report) is a stock that investors may consider adding to their portfolio to make some gains from its upside potential. The company currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Blackbaud has the favorable combination of a Growth Score of B and a Zacks Rank #2. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 or #2 and a Growth Score of A or B offer solid investment opportunities.
The stock is down 29.5% from its 52-week high level of $83.98 reached on Jan 04, 2022, making it more affordable for investors.The stock has lost 26.1% in the past year against the industry’s decline of 31.1%.
Image Source: Zacks Investment Research
Blackbaud has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average earnings surprise of 5%. The stock has long-term earnings per share growth expectation of 4%.
The Zacks Consensus Estimate for 2022 for earnings stands at $2.59 per share. For 2023, the consensus mark for earnings is pegged at $3.36, indicating a year-over-year increase of 29.5%. The consensus mark for revenues for 2022 and 2023 stands at $1.06 billion and $1.11 billion, representing year-over-year growth of 14.3% and 5%, respectively.
In the last reported quarter, Blackbaud’s total revenues increased 13% year over year to $261.3 million. The top line was driven by strength in recurring revenues.
For 2022, Blackbaud expects non-GAAP revenues between $1.05 billion and $1.07 billion. The company projects a non-GAAP adjusted EBITDA margin in the range of 23.7-24.2%. Non-GAAP earnings are expected to be between $2.43 and $2.63 per share. Non-GAAP adjusted free cash flow for the year is forecast in the range of $140-$150 million.
A Look at Fundamental Drivers
Headquartered in Charleston, SC, Blackbaud is a well-known cloud software company. The company offers a full spectrum of cloud-based and on-premise software solutions and related services for organizations of all sizes, especially social good organizations.
Blackbaud's cloud-based suite of applications demonstrates strong growth momentum, driven by the transition of organizations from the traditional revenue-based model to the cloud-based subscription model.
Frequent product launches and synergies from recent acquisitions bode well. The acquisition of EVERFI has helped the company to expand its total addressable market by about two times. In January 2022, the company acquired EVERFI in a cash-and-stock deal worth $750 million. EVERFI provides an Impact-as-a-Service solution and digital educational content. The acquisition also provides cross-selling and upselling opportunities with Blackbaud’s YourCause solution.
However, uncertainty prevailing over global macroeconomic conditions and rising inflation are major headwinds. A leveraged balance sheet adds to the risk of investing in the company. As of Sep 30, Blackbaud had total cash and cash equivalents of $375.4 million, while total debt (including the current portion) amounted to $854.1 million. Blackbaud had suspended dividend payouts to maintain near-term liquidity amid the COVID-19 crisis.
Other Stocks to Consider
Some other top-ranked stocks from the broader technology space are Arista Networks (ANET - Free Report) , Pure Storage (PSTG - Free Report) and Jabil (JBL - Free Report) . Arista Networks and Jabil currently sport a Zacks Rank #1, while Pure Storage carries a Zacks Rank #2.
The Zacks Consensus Estimate for Arista Networks’ 2022 earnings is pegged at $4.33 per share, up 7.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have increased 0.5% in the past year.
The Zacks Consensus Estimate for Pure Storage’s fiscal 2023 earnings is pegged at $1.18 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 35.5%.
Pure Storage’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 171.8%. Shares of PSTG have gained 13.9% in the past year.
The Zacks Consensus Estimate for Jabil’s fiscal 2023 earnings is pegged at $8.18 per share, rising 3.8% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 9.3%. Shares of JBL have increased 5% in the past year.