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Blackbaud Inc BLKB

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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Blackbaud Progressing on a Slow Return to Normal; FVE Remains $81

Dan Romanoff, CPA Equity Analyst

Analyst Note

| Dan Romanoff, CPA |

Wide-moat Blackbaud reported solid first-quarter results for revenue and adjusted EPS, exceeding FactSet consensus expectations. Management’s updated outlook for 2021 focused on the high end of its prior guidance of $910 million-$920 million in revenue. Pandemic-induced shifts to online giving and virtual events have created a significant opportunity in the payments space, one that Blackbaud is poised to capitalize on even as lockdowns end and life returns to normal. The confluence of a strong quarter of bookings, continuous cost-optimizing initiatives, and an impending rebound of in-person events as vaccine rollouts progress gives us confidence in the positive outlook that management issued for the remainder of 2021. Still, short-term revenue pressures lead us to maintain our fair value estimate of $81 per share. The share price fell about 6% to around $70 after the earnings report, but with the trough and subsequent inflection point in revenue growth expected in 2022, we view the shares as attractive for patient investors.

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Company Profile

Business Description

Founded in 1981, Blackbaud provides a suite of software solutions targeted at the “social good” community, including nonprofits, foundations, corporations, education institutions, healthcare institutions, and individual activists. Through mergers, acquisitions, and organic product development, the company has also moved into related areas outside of core fundraising, notably into K-12 schools. Blackbaud enables more than $100 billion in donations annually across a customer base in excess of 40,000 customers in at least 50 countries.

Contact
65 Fairchild Street
Charleston, SC, 29492
T +1 843 216-6200
Sector Technology
Industry Software - Application
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Slow Growth
Employees 3,100

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