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Blackbaud (BLKB) Gains 21.1% YTD: Will the trend Continue?
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Blackbaud (BLKB - Free Report) witnessed strong momentum this year, with its shares rallying 21.1% year to date compared with the S&P 500 composite rise of 16%.
Blackbaud is a well-known cloud software company. It offers a full spectrum of cloud-based and on-premise software solutions and related services for organizations of all sizes, especially social good organizations. It continues to invest heavily in cloud-based applications and software, which is expected to bolster long-term growth.
Image Source: Zacks Investment Research
Catalysts Behind the Price Surge
Let’s delve into the factors working in favor of this Zacks Rank #2 (Buy) stock.
The company benefits from higher transactional revenues owing to robust demand for its JustGiving and Tuition Management platforms. Also, rising volumes across its payment solutions is a major tailwind.
Frequent product launches and synergies from recent acquisitions bode well. The acquisition of EVERFI has helped the company to expand its total addressable market (TAM) by about two times. The company added more than $14 billion in the TAM through acquisitions and new product launches from 2014 to 2021.
The company has a five-point growth strategy with an objective to deliver innovative products, drive booking growth, transactional revenue expansion, modernize pricing and multi-year customer contracts and improve cost management.
The company reported first-quarter 2023 non-GAAP earnings of 72 cents per share, which surpassed the Zacks Consensus Estimate by 4.4%. The bottom line increased 26.3% year over year. Total revenues increased 1.8% year over year to $261.8 million and beat the Zacks Consensus Estimate by 1.3%. The top line was driven by strength in recurring revenues.
Due to the above-mentioned factors, the company has raised its guidance for 2023. The company now expects non-GAAP revenues to be between $1.095 billion and $1.125 billion compared with the earlier forecast of $1.08 billion and $1.11 billion. Non-GAAP earnings per share are anticipated to be between $3.63 and $3.94 compared with the earlier guided range of $3.30-$3.60.
The Zacks Consensus Estimate for fiscal 2023 and 2024 revenues increased 1.9% and 1.4%, respectively, in the past 60 days. This reflects analysts’ optimism regarding the company’s prospects.
Despite strong demand, the company operates in a highly competitive and capital-intensive cloud market. This is likely to negatively impact the company’s performance. Stiff competition and unfavorable foreign currency movement are likely to weigh down on the company’s performance in the near term.
The Zacks Consensus Estimate for Badger Meter’s 2023 earnings per share (EPS) has increased 1.1% in the past 60 days to $2.72.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 5.3%. Shares of BMI have surged 80.3% in the past year.
The Zacks Consensus Estimate for InterDigital’s 2023 EPS has increased 249% in the past 60 days to $8.08. The company’s long-term earnings growth rate is 13.9%.
InterDigital’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 170.9%. Shares of IDCC have rallied 51% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2023 EPS has increased 3.8% in the past 60 days to $3.58.
WWD’s long-term earnings growth rate is 13.5%. Shares of WWD have gained 14% in the past year.
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Blackbaud (BLKB) Gains 21.1% YTD: Will the trend Continue?
Blackbaud (BLKB - Free Report) witnessed strong momentum this year, with its shares rallying 21.1% year to date compared with the S&P 500 composite rise of 16%.
Blackbaud is a well-known cloud software company. It offers a full spectrum of cloud-based and on-premise software solutions and related services for organizations of all sizes, especially social good organizations. It continues to invest heavily in cloud-based applications and software, which is expected to bolster long-term growth.
Image Source: Zacks Investment Research
Catalysts Behind the Price Surge
Let’s delve into the factors working in favor of this Zacks Rank #2 (Buy) stock.
The company benefits from higher transactional revenues owing to robust demand for its JustGiving and Tuition Management platforms. Also, rising volumes across its payment solutions is a major tailwind.
Frequent product launches and synergies from recent acquisitions bode well. The acquisition of EVERFI has helped the company to expand its total addressable market (TAM) by about two times. The company added more than $14 billion in the TAM through acquisitions and new product launches from 2014 to 2021.
The company has a five-point growth strategy with an objective to deliver innovative products, drive booking growth, transactional revenue expansion, modernize pricing and multi-year customer contracts and improve cost management.
The company reported first-quarter 2023 non-GAAP earnings of 72 cents per share, which surpassed the Zacks Consensus Estimate by 4.4%. The bottom line increased 26.3% year over year. Total revenues increased 1.8% year over year to $261.8 million and beat the Zacks Consensus Estimate by 1.3%. The top line was driven by strength in recurring revenues.
Due to the above-mentioned factors, the company has raised its guidance for 2023. The company now expects non-GAAP revenues to be between $1.095 billion and $1.125 billion compared with the earlier forecast of $1.08 billion and $1.11 billion. Non-GAAP earnings per share are anticipated to be between $3.63 and $3.94 compared with the earlier guided range of $3.30-$3.60.
The Zacks Consensus Estimate for fiscal 2023 and 2024 revenues increased 1.9% and 1.4%, respectively, in the past 60 days. This reflects analysts’ optimism regarding the company’s prospects.
Despite strong demand, the company operates in a highly competitive and capital-intensive cloud market. This is likely to negatively impact the company’s performance. Stiff competition and unfavorable foreign currency movement are likely to weigh down on the company’s performance in the near term.
Other Stocks to Consider
Some other top-ranked stocks in the broader technology space are Badger Meter (BMI - Free Report) , InterDigital (IDCC - Free Report) and Woodward (WWD - Free Report) . InterDigital sports a Zacks Rank #1 (Strong Buy), while Badger Meter and Woodward carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Badger Meter’s 2023 earnings per share (EPS) has increased 1.1% in the past 60 days to $2.72.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 5.3%. Shares of BMI have surged 80.3% in the past year.
The Zacks Consensus Estimate for InterDigital’s 2023 EPS has increased 249% in the past 60 days to $8.08. The company’s long-term earnings growth rate is 13.9%.
InterDigital’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 170.9%. Shares of IDCC have rallied 51% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2023 EPS has increased 3.8% in the past 60 days to $3.58.
WWD’s long-term earnings growth rate is 13.5%. Shares of WWD have gained 14% in the past year.