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Blackbaud (BLKB) Raises Share Buyback Authorization by $200M

Zacks Equity Research
·3 min read

Blackbaud, Inc. BLKB announced that it will increase its share buyback authorisation by another $200 million, bringing the total shares under buyback authorisation to $250 million. The company also added that it could buyback 10% of the outstanding shares as of Oct 28, 2020 at the closing price of shares on Nov 12.

Management is working on capital level allocation strategy to fuel long-term growth. Notably, the company has recently expanded its credit facility to enhance financial capacity and flexibility.

The company had announced a $50-million share repurchase program in 2010 but did not repurchase any shares under the authorization as of Sep 30. The authorization does not have any time limit.

Notably, share buybacks benefit a company’s bottom line by reducing the number of shares outstanding and boost investors’ confidence in the stock.

In the second quarter of 2020, Blackbaud suspended its dividend payout to retain liquidity amid COVID-19 crisis. In 2019, the company shelled out $23.6 million in dividend payouts at an annual rate of 48 cents per share.

Blackbaud, Inc. Price and Consensus

 

Blackbaud, Inc. Price and Consensus
Blackbaud, Inc. Price and Consensus

Blackbaud, Inc. price-consensus-chart | Blackbaud, Inc. Quote

 

The company also announced that it will host a conference call on Dec 2, 2020 to provide investors with the company’s long-term outlook. The company will release the long-term goals on Dec 1, 2020.

Blackbaud’s endeavours to improve its capital and financial position will enable the company to maximise value to shareholders as well as accelerate the company’s growth in the future.

Notably, shares of the company have declined 34.2% compared with the industry’s rally of 31.4% on a year-to-date basis.

Abundant Market Prospects

Exponential growth in data along with intricate management of various data formats and increasing need for scalability is compelling enterprises to move their workloads to cloud. Moreover, cloud adoption has been accelerated by the remote work trend induced by the coronavirus crisis. Abundant growth opportunities in the cloud space augur well for Blackbaud.

Per Verified Market Research report, the worldwide cloud computing market is envisioned to hit $718.07 billion in 2027 at a CAGR of 13.9% between 2020 and 2027. 

Blackbaud is likely to benefit from its extensive product portfolio, which boasts of cloud software solutions that are infused with emerging technologies like machine learning (ML), artificial intelligence (AI), as well as cognitive technology and predictive analytics.

The company’s SKY platform provides organisations with improved cloud capabilities and fosters innovation. The acquisitions including the buyouts of YourCause and JustGiving will also boost the total addressable market for Blackbaud.

Blackbaud is a well-known cloud software provider that works mostly with organisations engaged in social causes. The company has more than 45,000 clients across 100 countries.

Zacks Rank and Key Picks

Blackbaud currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader technology sector worth considering are Jabil JBL, Cadence Design Systems CDNS and NVIDIA NVDA. Jabil sports a Zacks Rank #1 (Strong Buy), while Cadence and NVIDIA carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Jabil, Cadence and NVIDIA is currently pegged at 12%, 15.4%, and 20.1%, respectively.

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