Blackbaud (BLKB) Surges 24% YTD: Will the Uptrend Continue?
Blackbaud BLKB, a leading cloud software company working for social causes and serving mainly nonprofit and education sectors, is witnessing strong momentum this year with shares having gained 23.8% year to date compared with the S&P 500 Composite return of 10.4%.
The increase in share price is driven by the company’s robust financial performance. The company reported impressive performance in first-quarter 2023.
Blackbaud reported first-quarter 2023 non-GAAP earnings of 72 cents per share, which surpassed the Zacks Consensus Estimate by 4.4%. The bottom line increased 26.3% year over year. Total revenues increased 1.8% year over year to $261.8 million and beat the consensus estimate by 1.3%. The top line was driven by strength in recurring revenues. Non-GAAP organic revenues were up 2.3% on a reported basis and 3.4% on a constant-currency basis, year over year.
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Total recurring revenues (contributed 96.6% to total revenues) in the reported quarter amounted to $252.7 million, up 3.3% year over year. One-time services and other revenues (3.4% of total revenues) amounted to $9 million, down 27.7% year over year.
Blackbaud’s performance benefited from higher transactional revenues owing to robust demand for the company’s JustGiving and Tuition Management platforms coupled with rising volumes across its payment solutions. Frequent product launches coupled with rising customer renewal rates and booking bode well.
Going ahead, the company is likely to benefit from its new contractual pricing approach. It continues to invest heavily in cloud-based applications and software, which is expected to bolster long-term growth.
Owing to the above-mentioned factors, the company has raised its non-GAAP revenues for 2023. The company now expects revenues to be between $1.095 billion and $1.125 billion compared with the previously guided range of $1.08 billion and $1.11 billion. Blackbaud now projects non-GAAP adjusted EBITDA margin in the range of 30.5-31.5%, compared with the earlier guided range of 29.5-30.5%. Non-GAAP earnings per share are anticipated to be between $3.63 and $3.94, compared with the prior guided range of $3.30-$3.60.
Synergies from acquisitions are likely to further drive the company’s top and bottom lines going forward. The company’s EVERFI acquisition remains an important buyout and is expected to boost the company’s total addressable market, especially within the corporate sector.
Blackbaud currently sports a Zacks Rank #1 (Strong Buy).
The Zacks Consensus Estimate for revenues for 2023 and 2024 has increased 7.3% and 13.5%, respectively, in the past 60 days reflecting analysts’ optimism about the company’s prospects.
Other Stocks to Consider
Some other top-ranked stocks in the broader technology space are Woodward WWD, Simulations Plus SLP and Badger Meter BMI. All stocks currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Woodward’s fiscal 2023 earnings has increased 9.1% in the past 60 days to $3.58 per share. WWD’s long-term earnings growth rate stands at 13.5%. Shares of WWD have surged 12.5% in the past year.
The consensus estimate for Simulations Plus’ fiscal 2023 earnings has improved by 1 cent in the past 60 days to 66 cents per share. Shares of SLP have lost 1.9% in the past year.
The consensus mark for BMI’s 2023 earnings is pegged at $2.69 per share, up 4.7% in the past 60 days.
BMI’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 5.3%. Shares of BMI have increased 82.4% in the past year.
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