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Blackbaud Inc BLKB

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Morningstar’s Analysis

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Blackbaud’s Investor Day Highlights the Drive to the Rule of 40 Framework; Maintain $81 FVE

Dan Romanoff, CPA Equity Analyst

Analyst Note

| Dan Romanoff, CPA |

Wide-moat Blackbaud hosted a virtual annual investor day on March 25, providing an in-depth look at its key growth areas and reemphasizing its leading position as the world emerges from the pandemic. Blackbaud should benefit from several pandemic-induced tailwinds driving digitalization across its verticals, chief among them being a move to online giving and payment processing. In addition to reaping the benefits of an increasingly digitalized industry, Blackbaud emphasized the progress of several initiatives, namely the move to the cloud and the leading technology therein, and an expanding addressable market opportunity, and a largely untapped international opportunity. Management noted based on year-to-date sales, the company is tracking to the higher end of previously issued guidance, which is a welcome sign. Overall, we see the investor day as in line with our view that Blackbaud is a leader in the non-profit space and see the company’s push to a rule of 40 framework over time as generally consistent with our DCF model. We are maintaining our $81 fair value estimate and see shares as attractive.

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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 Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Slow Growth
Employees 3,100

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