Blackbaud (BLKB) AI Stock Analysis

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Blackbaud

(NASDAQ:BLKB)

Rating:51Neutral

Price Target:

$64.00

▲(0.87%Upside)

Blackbaud's overall stock score is primarily influenced by its challenging financial performance and valuation concerns, including persistent losses and high leverage. Technical analysis suggests mixed momentum, while the earnings call provides some optimism with strategic initiatives and revenue growth. Overall, the company faces significant risks, but proactive measures and innovations offer potential for recovery and growth.

Positive Factors

Demand stability

Management is confident the business is not seeing any disruptions in the demand due to the macro or Federal budget scrutiny affecting its target end-markets.

Revenue growth target

On an organic revenue basis, the business delivered a Rule-of-40 profile, which is its near-term target.

Negative Factors

Financial guidance

The 1Q25 outperformance did not flow through as the 2025 guidance was reaffirmed, which could be interpreted as a guide down and could weigh on sentiment.

Peer performance

Shares could underperform its other vertical software peers that grow faster or generate higher free cash flow margins.

Transactional revenue risk

There could be some risk with its transactional revenue stream, as a significant portion of this revenue is generated through donations, which could be pulled back first in a recessionary backdrop.

Blackbaud (BLKB) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$3.10B

Dividend YieldN/A

Average Volume (3M)269.23K

Price to Earnings (P/E)78.5

Beta (1Y)0.72

Revenue Growth2.07%

EPS Growth-1519.89%

CountryUS

Employees2,600

SectorTechnology

Sector Strength83

IndustrySoftware - Application

Share Statistics

EPS (TTM)0.96

Shares Outstanding48,517,704

10 Day Avg. Volume208,699

30 Day Avg. Volume269,226

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)91.73

Price to Sales (P/S)0.00

P/FCF Ratio15.63

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$67.00

Price Target Upside5.59% Upside

Rating ConsensusHold

Number of Analyst Covering4

Blackbaud Business Overview & Revenue Model

Company DescriptionBlackbaud, Inc. (BLKB) is a leading provider of cloud-based software solutions and services designed specifically for the global social good community, which includes nonprofits, foundations, companies, education institutions, healthcare organizations, and other charitable entities. The company's core products and services focus on fundraising and relationship management, financial management, grant and award management, organizational and program management, and payment services, tailored to enhance the capabilities of its clients in driving social impact.

How the Company Makes MoneyBlackbaud generates revenue primarily through a subscription-based model for its software-as-a-service (SaaS) offerings, which provide clients with access to its suite of cloud-based solutions. The company also earns revenue from professional services, which include consulting, training, and implementation support to help organizations maximize the value of their software investments. Additionally, Blackbaud benefits from transaction-based fees associated with its payment processing services. Key revenue streams include subscriptions to its various software solutions, professional services, and transaction fees. Strategic partnerships and acquisitions also play a role in expanding its product offerings and customer base, contributing to Blackbaud's overall earnings.

Blackbaud Key Performance Indicators (KPIs)

Any

Annual Recurring Revenue by Type

Annual Recurring Revenue by Type
Measures the predictable income from subscription-based services, indicating the company's stability and potential for sustained growth.

Chart InsightsBlackbaud's contractual revenue showed consistent growth until a sharp decline in early 2025, possibly due to macroeconomic factors or strategic shifts. Meanwhile, transactional revenue has been volatile but generally rising, with recent overperformance. The earnings call highlights the company's strong financial performance and strategic innovations, despite challenges in forecasting transactional revenue. This suggests that while Blackbaud is innovating and maintaining growth, investors should be cautious of potential revenue volatility and macroeconomic impacts.

Data provided by:

Main Street Data

Blackbaud Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: -0.95%|

Next Earnings Date:Aug 05, 2025

Earnings Call Sentiment Positive

The earnings call reflects a solid financial performance with notable achievements in innovation and strategic initiatives, despite facing some challenges in cash flow and revenue forecasting. Blackbaud's resilience and proactive measures position the company well for future growth.

Q1-2025 Updates

Positive Updates

Strong Financial Performance

Blackbaud reported a revenue of $271 million for Q1 2025, marking a 5.8% organic growth with a non-GAAP adjusted EBITDA margin of 34.3% and a non-GAAP diluted earnings per share of $0.96. The company also achieved a Rule of 40 score of 40.1%.

Innovative Initiatives and Product Developments

Blackbaud showcased significant product innovation including AI integration to enhance grant-making processes and Expedited Giving which aims to reduce the lag time for employee donations to nonprofits.

Successful Share Buyback Program

In Q1 2025, Blackbaud repurchased approximately 4% of its outstanding shares, aligning with its plan of buying between 3% to 5% of outstanding shares in 2025.

Resilience in Challenging Times

Despite uncertainties, Blackbaud's solutions remain critical to customers, particularly in fundraising from individual donors, showing resilience through economic challenges.

Positive Market Reaction to Innovations

The recent Corporate Social Impact Summit in Dallas received positive feedback from executives, highlighting the impact of Blackbaud's innovations.

Negative Updates

Negative Free Cash Flow

Blackbaud reported an adjusted free cash flow of negative $11 million in Q1 2025, impacted by a one-time cash release payment associated with the Washington, D.C. office lease and increased interest expenses.

Challenges in Forecasting Transactional Revenue

Despite transactional revenue overperforming in Q1, the volatility and unpredictability of transactional events pose challenges in forecasting future revenue.

Company Guidance

During Blackbaud's first quarter 2025 earnings call, the company provided various metrics and guidance, reflecting its solid financial performance and strategic direction. Blackbaud reported a revenue of $271 million, marking a 5.8% organic growth, accompanied by a non-GAAP adjusted EBITDA margin of 34.3% and non-GAAP diluted earnings per share of $0.96. The company achieved a Rule of 40 score of 40.1%, which aligns with its long-term goal of reaching a Rule of 45 by 2030. For the full year 2025, Blackbaud maintained its guidance, projecting revenue between $115 million and $1.125 billion, which signifies an organic growth range of 4.2% to 5.1%. The projected EBITDA margins range from 34.9% to 35.9%, with non-GAAP EPS expected to be between $4.16 and $4.35 per share. The company plans to continue stock repurchases between 3% and 5% of outstanding shares, having already repurchased approximately 4% in the first quarter. The guidance remains unchanged, assuming no significant macroeconomic shifts, and Blackbaud anticipates adjusted free cash flow for the year to be between $185 million and $195 million.

Blackbaud Financial Statement Overview

Summary

Blackbaud's financial performance is hindered by negative EBIT and net income, modest revenue growth, and a high leverage ratio. Despite stable gross profit margins, the financial health is at risk due to operational inefficiencies and declining equity, though stable cash flows provide some resilience.

Income Statement

Negative

Blackbaud's income statement reveals a challenging financial scenario. The TTM data shows continued negative EBIT and net income, indicating ongoing operational challenges and a lack of profitability. While gross profit margin remains relatively stable, the significant decline in net profit margin due to sustained losses is concerning. Revenue growth has been modest but insufficient to offset the high operating costs and declining profit margins.

Balance Sheet

Negative

The balance sheet indicates a precarious financial position with high leverage. The debt-to-equity ratio is concerningly high, reflecting significant financial risk. Stockholders' equity has drastically declined, leading to a low equity ratio. The substantial liabilities compared to assets highlight potential liquidity risks. Despite these challenges, the company maintains a reasonable level of total assets, providing some stability.

Cash Flow

Neutral

The cash flow statement provides a mixed view. Operating cash flow remains positive and relatively stable, demonstrating some resilience in cash generation ability. However, the free cash flow has declined, and the ratio of operating cash flow to net income is distorted by the negative net income. The cash flow from investing and financing activities shows consistent outflows, indicating ongoing investments but also potential cash constraints.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.15B	1.16B	1.11B	1.06B	927.74M	913.22M
	Gross Profit
640.97M	639.20M	600.11M	552.72M	484.55M	485.15M
	EBIT
-256.70M	-270.51M	44.70M	-19.77M	24.91M	37.24M
	EBITDA
-180.75M	-115.16M	167.05M	88.12M	103.78M	127.81M
	Net Income Common Stockholders
-287.33M	-283.17M	1.82M	-45.41M	5.70M	7.72M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
25.01M	67.63M	31.25M	31.69M	55.15M	35.75M
	Total Assets
1.37B	2.50B	2.91B	2.99B	2.97B	2.04B
	Total Debt
467.17M	1.11B	819.75M	903.96M	1.01B	548.39M
	Net Debt
442.15M	1.04B	788.50M	872.27M	954.42M	512.64M
	Total Liabilities
1.02B	2.35B	2.10B	2.25B	2.25B	1.62B
	Stockholders Equity
344.32M	141.99M	808.71M	744.03M	717.06M	426.15M
Cash Flow		Free Cash Flow
195.06M	288.52M	135.51M	132.83M	161.51M	76.11M
	Operating Cash Flow
232.74M	295.97M	199.63M	203.89M	213.66M	147.96M
	Investing Cash Flow
-84.79M	-73.41M	-64.39M	-85.55M	-471.27M	-71.85M
	Financing Cash Flow
-74.75M	-139.35M	-142.97M	-25.69M	264.11M	-10.68M

Blackbaud Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price63.45

Price Trends

50DMA

62.42

Positive

100DMA

66.88

Negative

200DMA

74.25

Negative

Market Momentum

MACD

0.01

Negative

RSI

53.53

Neutral

STOCH

81.48

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BLKB, the sentiment is Neutral. The current price of 63.45 is above the 20-day moving average (MA) of 63.00, above the 50-day MA of 62.42, and below the 200-day MA of 74.25, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 53.53 is Neutral, neither overbought nor oversold. The STOCH value of 81.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BLKB.

Blackbaud Risk Analysis

Blackbaud disclosed 29 risk factors in its most recent earnings report. Blackbaud reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 1 New Risks

Changes in the US federal or state governmental grant, award or other funding programs could negatively impact the operations of our nonprofit customers, which could have a material adverse effect on our business, results of operations, financial condition and liquidity. Q4, 2024

Blackbaud Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CXM	80 Outperform	$2.20B	22.08	17.50%	―	6.75%	97.06%
BL	71 Outperform	$3.59B	26.74	44.83%	―	8.93%	102.77%
FRSH	71 Outperform	$4.60B	―	-6.85%	―	20.46%	39.37%
Sector *	62 Neutral	$11.75B	10.58	-7.10%	2.91%	7.47%	-7.95%
QTWO	62 Neutral	$5.58B	―	-3.95%	―	13.12%	75.24%
BLKB	51 Neutral	$3.10B	78.53	-101.31%	―	2.07%	-1519.89%

* Technology Sector Average

Performance Comparison

BLKB

Blackbaud

63.45

-14.67

-18.78%

QTWO

Q2 Holdings

89.98

28.84

47.17%

BlackLine

58.22

12.21

26.54%

CXM

Sprinklr

8.85

-0.07

-0.78%

FRSH

Freshworks

15.61

2.88

22.62%

Blackbaud Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Blackbaud Announces Leadership Changes with New CFO

Neutral

Apr 30, 2025

On April 30, 2025, Blackbaud announced leadership changes with Chad Anderson promoted to Executive Vice President and Chief Financial Officer, succeeding Anthony W. Boor, who transitioned to Executive Vice President of Corporate Development and Strategy. These changes aim to enhance Blackbaud’s financial operations and strategic development, with Anderson bringing extensive experience from his previous roles within the company and Boor focusing on long-term value and enterprise-wide strategies.

Executive/Board Changes

Blackbaud Amends CEO Compensation Agreement

Neutral

Mar 13, 2025

On March 10, 2025, Blackbaud, Inc. amended its employment agreement with CEO Michael P. Gianoni to align his compensation with other executives, shifting his annual bonus to an equity-based award. The amendment also modifies severance terms, introducing a new COBRA reimbursement benefit and changing the conditions for equity award vesting upon termination due to death or disability, impacting the company’s executive compensation structure and potentially its financial planning.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.