Blackbaud (BLKB) Soars 10.6%: Is Further Upside Left in the Stock?

·2 min read

Blackbaud BLKB shares ended the last trading session 10.6% higher at $63.93. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 1.2% gain over the past four weeks.

The increase in share price can be attributed to Blackbaud’s announcement that it rejected a “unsolicited” and a “non-binding proposal” from Clearlake Capital Group, L.P to acquire all of the shares of the company for $71.00 per share in all cash deal.

The company’s board of directors unanimously rejected the proposal after a thorough review as the proposal significantly undervalued Blackbaud. The board further added that the Clearlake proposal is “highly opportunistic” and not in the best interest of stockholders. Blackbaud added that the proposal also does not take into consideration the “tangible momentum” in Blackbaud’s business.

This software and services provider in the nonprofit sector is expected to post quarterly earnings of $0.69 per share in its upcoming report, which represents a year-over-year change of +21.1%. Revenues are expected to be $258.95 million, up 0.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Blackbaud, the consensus EPS estimate for the quarter has been revised 1.2% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on BLKB going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Blackbaud is a member of the Zacks Computer - Software industry. One other stock in the same industry, Cadence Design Systems CDNS, finished the last trading session 0.4% higher at $205.27. CDNS has returned 5.5% over the past month.

Cadence's consensus EPS estimate for the upcoming report has changed -0.2% over the past month to $1.25. Compared to the company's year-ago EPS, this represents a change of +6.8%. Cadence currently boasts a Zacks Rank of #2 (Buy).

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