Blackbaud Up 12.5% in a Month: How to Approach the Stock Now?

Core Insights - Blackbaud, Inc. (BLKB) is experiencing growth due to a strong product portfolio, AI-driven innovation, and margin expansion, aiming for Rule of 45 status by 2030 [1][10] - The company's shares increased approximately 12.5% in the past month, outperforming the Zacks Computer – Software industry's growth of 2.8% [1] Product Portfolio and Innovation - Blackbaud is focusing on cloud software solutions and data-driven decisions, utilizing AI, machine learning, and predictive analytics [3] - The introduction of Agents for Good, an AI suite, aims to assist social impact organizations by automating complex tasks [4] - The launch of the 2025 Ultimate End-of-Year Fundraising Toolkit is designed to enhance fundraising success for organizations [5] - A partnership with Constant Contact allows for better engagement across various digital channels within Blackbaud Raiser's Edge NXT [6] Financial Performance and Projections - For full-year 2025, Blackbaud anticipates non-GAAP EPS between $4.30 and $4.50, with an adjusted EBITDA margin projected at 35.4-36.2% [7][9] - The company expects adjusted free cash flow of $195–$205 million for 2025, supporting investments in innovation and shareholder returns [10] - Projected GAAP revenues are between $1.120 billion and $1.130 billion, indicating approximately 5% organic growth [11] Competitive Landscape and Challenges - Blackbaud faces competition from nonprofit-focused peers and large enterprises, which pressures pricing and margins [12] - Ongoing acquisitions increase integration risk and have inflated goodwill and intangibles to 55.6% of total assets as of September 30, 2025 [12] Valuation and Investment Appeal - The stock trades at a forward 12-month P/E ratio of 18.46, below the industry's average of 28.81, indicating potential undervaluation [13] - With strong cash flow, a robust product portfolio, and consistent share repurchase programs, BLKB presents an attractive investment opportunity [14]