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Blackbaud Inc BLKB

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Morningstar’s Analysis

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Blackbaud’s Business Is Picking Up, With Quarterly Strength Driven by Online Payments; FVE Up to $81

Dan Romanoff, CPA Equity Analyst

Analyst Note

| Dan Romanoff, CPA |

Wide-moat Blackbaud reported strong fourth-quarter results for revenue and adjusted EPS relative to investor expectations, exceeding FactSet consensus estimates. Given the heightened uncertainty, management’s outlook included both upside and downside scenarios along with its base case of $900 million in revenue for 2021. The key swing factors are transactional revenue and bookings, which management noted were strong in January. While we expect Blackbaud’s revenue to see continued pressure in 2021, particularly from headwinds arising from the 2020 bookings shortfall, we view the shift to online giving and increasing digitalization across its end markets as long-term value-driving opportunities. Further, we are encouraged by increasing retention rates, even during the pandemic, and strong margin performance in the quarter. As a result, we are raising our fair value estimate to $81 per share from $70 and view shares as about fairly valued.

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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.

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