Should You Think About Buying Blackbaud, Inc. (NASDAQ:BLKB) Now?

Blackbaud, Inc. (NASDAQ:BLKB), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Blackbaud’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Blackbaud

What's The Opportunity In Blackbaud?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 9.7% below my intrinsic value, which means if you buy Blackbaud today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $70.83, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Blackbaud’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Blackbaud generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Blackbaud's revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? BLKB’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on BLKB, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Blackbaud, you'd also look into what risks it is currently facing. When we did our research, we found 3 warning signs for Blackbaud (1 can't be ignored!) that we believe deserve your full attention.

If you are no longer interested in Blackbaud, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.